Psychological factors and investment decisions among United States International University students, Nairobi County, Kenya

Abstract

The purpose of the study was to investigate the influence of psychological factors on investment decisions among United States International University students in Nairobi County, Kenya. The following specific objectives guided the study: examine the relationship between attitudes on investments decisions among USIU students, investigate the effect of subjective norms on investments decisions among USIU students, and assess the influence of perceived behavioural control on investments decisions among USIU students. The researcher adopted an exploratory research design. The target population for the study was the 5,932 enrolled students of the United States International University 2015. The researcher employed the Yamane sample size formula which produced a sample size of 197 respondents. The researcher was able to collect 167 questionnaires which corresponded to a response rate of 86.0 %. Data for this study was collected through a survey. The questionnaire contained five sections; these sections covered the background information, influence of attitude on investment decisions, influence of subjective norm on investment decisions, influence of perceived behaviour control on investment decisions and intention to invest. The researcher adopted both descriptive (mean, standard deviation, frequencies and percentages) and inferential statistics (correlation and regression analysis) to make meaning of the data and measure relationships. Tables were used to present data collected for ease of understanding and analysis. The Pearson’s correlation results show that attitudes (r = 0.072; p > 0.358) did not have a statistically significant influence on intention to invest among USIU students. The researcher further conducted a multiple regression analysis to establish the influence of attitudes, subjective norms and perceived behaviour control on student’s investments. The regression analysis showed that attitudes (β = -0.033; p > 0.372) did not have a statistically significant influence on students intention to invest. The Pearson’s correlation results show that subjective norms (r = 0.440; p < 0.000) had a statistically significant impact on plans to invest in USIU students. The regression analysis showed that subjective norm (β = 0.357; p <0.000) had a statistically significant prediction of the independent variable. The Pearson’s correlation results show that perceived behavioural control (r = 0.472; p < 0.000) had a statistically significant influence on intention to invest by USIU students, however the regression analysis v

showed that perceived behaviour control (β = 0.335; p <0.000) had a statistically significant prediction of the independent variable. The study concluded that attitudes towards investment decisions are not an important factor. However the study finds that subjective norms were significant predictor of student intention to invest. Perceived behaviour control was found to be the second most significant predictor of student decision to invest. The study recommended that USIU students should have positive attitudes on financial investments as this would enhance their investment portfolio. Therefore, USIU students should not over rely on information from significant others as this information may not be of a professional nature and may risk poor investments and lose on actual investments. The study further recommends that a similar study be conducted in other universities to corroborate the study findings.