Investor Characteristics and Their Effect on Investment Decisions among Public University Workers in Kenya

Abstract

Investment decision has become part of individuals’ lives in the in recent days. People invest in insurance policies, fixed deposits, shares, equities, real estate, mutual funds, and government securities among others. Universities are the peak of knowledge hence the community expects that workers in such institutions be in the frontline in making informed investment decisions. Although the university staff work in the same environment, it has not yet been established how their different investor characteristics affect their investment decisions. There is scanty information on the moderating effect of mobile borrowing on the relationship between investors’ risk attitude, demographic profile, and socio-economic status on investment decisions. This study investigated the effect of the investor characteristics on investment decision. The objectives of the study were to; assess the effect of investor risk attitude on investment decision among public university workers in Kenya, test the effect of the investor demographic profile on investment decisions among public university workers in Kenya, and determine the effect of socio-economic status on investment decision among public university workers in Kenya. Finally, the study examined the moderating effect of mobile borrowing on the effect of investor risk attitude and socio-economic status on investment decision among public university workers in Kenya. Capital Asset Pricing Model, Efficient Markets Hypothesis, Prospect Theory and Behavioural Finance Theory guided the study. The study adopted a descriptive survey research design with a target population of 2075 workers from the sampled Public Universities in Kenya. Stratified random sampling technique was employed from which a sample of 336 was used. Further, the study used primary data sources through a structured questionnaire. The questionnaires were administered using google forms. Data was analysed with the aid of SPSS version 26 software and Microsoft excel. Charts, tables, graphs, and figures were used to present the results. The results of the study indicated that risk attitude played the biggest role in investment decision-making since it explained 41.7 percent of investment decision. In addition, all the demographic factors influenced the choice of investment. The results also showed that investors in the age of 31-40 were willing to diversify their investments unlike the other age groups. Mobile borrowing was found to moderate the relationship between investment decision and its predictors. The study recommends that a similar study is conducted once the government operationalises the mobile lending control. Since workers between 31-40 years were found to have a much higher affinity for risk and investment, the government should consider targeting civil servants and other professionals in this age group by providing them with investment incentives.