Economics at your fingertips  

Impact of Personality Traits on Risk Tolerance and Investors' Decision Making

Misbah Sadiq and Hareem Amna
Additional contact information
Misbah Sadiq: Al Qasimia University, Sharja, UAE
Hareem Amna: Quaid-i-Azam University, Islamabad, Pakistan

International Journal of Applied Behavioral Economics (IJABE), 2019, vol. 8, issue 1, 1-20

Abstract: This article investigates the relationships between personality traits, risk tolerance, and investment decisions and highlights the importance of personality traits in determining risk tolerance levels and investment decisions. Personality traits are classified according to the Big Five taxonomy: extroversion, agreeableness, conscientiousness, neuroticism and openness to experience. Primary data was collected from 330 individual investors from Islamabad. Descriptive analysis of the data was run on SPSS, reliability of the constructs was assessed through Confirmatory Factor Analysis (CFA), whereas, Structural Equational Modelling (SEM) was used to conduct hypothesis testing through path analysis. As per the results of CFA, the constructs were found to be reliable. Mediation analysis confirmed that risk tolerance partially mediated the relationship between personality traits and investment decisions. This study and results have theoretical and practical implications for the investors, financial planners and managers.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link) ... 018/IJABE.2019010101 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

International Journal of Applied Behavioral Economics (IJABE) is currently edited by Yun Wan

More articles in International Journal of Applied Behavioral Economics (IJABE) from IGI Global
Bibliographic data for series maintained by Journal Editor ().

Page updated 2023-05-18
Handle: RePEc:igg:jabe00:v:8:y:2019:i:1:p:1-20