Investor Behaviour in Mumbai’s Stock Market: A Study on Gender-Based Risk Tolerance and Decision-Making Patterns

Abstract

The behaviour of investors is affected by psychological biases and risk attitudes that can differ drastically between genders. This paper aims to examine the variations in the risk perception and decision making of educated investors in Mumbai. It highlights the extent of herding behaviour, overconfidence bias, and the disparities in risk tolerance between male and female investors. Using survey data from 202 educated individuals, the paper employs a hypothesis test which is the z-test to statistically analyse these biases across gender. The results shed light on the role of herding behaviour as it shows a significant difference in males and females while making investment choices. As such, it offers important implications for financial advisers, policymakers, and investors helping them understand the gender differences and their possible resolutions.