Financial attitude based segmentation of women in India: an exploratory study

Abstract

Purpose – The purpose of this paper is to identify factors influencing the financial attitudes of Indian women and then classifying Indian women based on these attitudes. These clusters are then studied for their characteristics. Design/methodology/approach – Literature reviewed led to the identification of variables influencing financial attitude of women. Nine of these variables (anxiety, interest in financial issues, intuitive decisions, precautionary saving, free spending, materialistic and fatalistic attitude, propensity to plan for long and short-term financial goals) were put through confirmatory factor analysis. These factors were then used as a basis for cluster analysis. The study was conducted in the city of Nashik, India, in 2014-2015, using convenience sampling. A self-reported questionnaire was used for the survey. Findings – Results of the study showed that only a third of the respondents did not buy any financial products. The most preferred financial products of Indian women were fixed deposits and insurance policies. Four clusters of women were identified, based on their financial attitudes – judicious consumers, conservative consumers, acquisitive consumers, unsure consumers. An analysis of the dispersion of the clusters shows that interest in financial issues has the greatest influence in the formation of clusters followed by the propensity to plan and materialistic attitude. Fatalistic attitude had the least influence in the formation of clusters. Research limitations/implications – The current study uses convenience sampling which is non-probability-based sampling and hence, lack generalizability of results. The sample for the current study is small, given the resource availability of the researcher and the unwillingness of women to participate in the survey. Practical implications – The paper provides important insights for the marketers of financial services, in understanding the women consumers in the expanding Indian market. Social implications – An understanding of the women consumers would help marketers develop products and financial literacy programs that suit the requirements of each specific group. By doing so the programs and communcation would be more effective. Originality/value – This paper discusses the financial attitudes and behavior of Indian women and further clusters these women based on their financial attitudes.

Has financial attitude impacted the trading activity of retail investors during the COVID-19 pandemic?

“…The relationships were linear and positive, as witnessed from the values of the correlations ( Table 6 ). The effect of these dimensions on individuals' financial behavior, in general, has been revealed by past studies ( Paluri and Mehra, 2016 ; Stromback et al, 2017 ). In the case of optimism, this result implies that retail investors who are positive about the future and expect the best outcomes in uncertain times are likely to trade more in the face of massive disruptors, such as the COVID-19 pandemic.…”

“…They assessed financial attitude in terms of needs for precautionary savings, decision styles, spending tendency, interest in financial issues, and anxiety. Similarly, the Organisation for Economic Co-operation and Development (OECD) proposed an instrument to measure the financial attitude of investors based on the extent of their belief in planning and their propensity to save and spend ( Paluri and Mehra, 2016 ). In comparison, Tsui-Yii and Sheng-Chen (2014) used achievement, prestige, power, and respect as the key determinants of financial attitude.…”

“… Lim et al (2013) found that women tend to exhibit more anxiety about financial issues than their male counterparts. Given that anxiety is associated with low predictability of stock price trends, scholars have contended that anxiety, therefore, causes individuals to make conservative investment decisions ( Paluri and Mehra, 2016 ). We believe that anxiety, as an attitude, can influence the trading decisions of retail investors, particularly when there is a plethora of negative information regarding the turmoil in the financial markets and the impact of the COVID-19 outbreak ( Al-Awadhi et al, 2020 ; Zhang et al, 2020 ).…”

Attitudes toward Finance: A Focus Group Study on Women in Italy

“…Differently again, Haque e Zulfiqar (2016) state that financial attitude "deals with ability to manage finances, interest of the individual in increasing financial knowledge, spending versus saving attitude and attitude toward taking risk while making an investment". As a consequence of this variety of definitions, the construct "financial attitude" has also been operationalized and measured in different ways in different studies, making generalization difficult (Schrader and Lawless, 2004;Atkinson and Messy, 2012;Bongini et al, 2013;The Word Bank, 2013;Anz, 2015;Paluri and Mehra, 2016). A crucial assumption, in the tradition of scientific literacy, is that it is improper to consider as perfect synonyms constructs such as (financial) "attitude", (financial) "aptitude" and "attitude toward" (finance); they are not interchangeable (Garder, 1975;Gauld and Hukins, 1980;Rao, 2010).…”

Assessing consumer literacy on financial complex products

“…Though there is a substantial body of theoretical and empirical work on the economics of education, little research has been conducted on understanding adults' financial literacy level (Agnew & Harrison, 2015;Paluri & Mehra, 2016). Our contribution to the literature on financial education's effectiveness is threefold.…”