The Effect of Financial Literacy on Risk Tolerance as an Intervening Variable Against Decision Making
Main Article Content
Keywords
Decision Making, Financial Literacy, Risk Tolerance
Abstract
This study aims to analyze the effect of financial literacy and risk tolerance as an intervening variable on decision making. The phenomenon in this study is how financial literacy influences risk tolerance as an intervening variable on decision making (a Makassar Investor study during the Covid-19 pandemic). This research was conducted during the Covid-19 Pandemic, starting at the end of 2019 until the end of 2020, so that phenomena related to financial literacy, risk tolerance, and decision making for investors in Makassar had not existed before. This research used the Structural Equation Model (SEM) method with the Smart PLS 3.0 software program, the data source is primary data from 290 investors registered with securities companies in Makassar. Data were obtained through interviews and distributing questionnaires to determine the effect of financial literacy through investment risk tolerance on decision making. The results showed that the financial literacy factor through risk tolerance had no effect on financial decisions.
References
Bechara, A., & Tranel, D. (1997). Department of Neurology, Division of Behavioral Neurology and Cognitive Neuroscience, University of Iowa College of Medicine, Iowa City, IA 52242, USA.
Body (2012). Investment Book I. Sixth Edition. Salemba Four. Jakarta
Mandell, L. (2009). The Financial Literacy of Young American Adult: Result of the 2008 National JumpStart Coalition Survey of High School Senior and College Student. Washington, DC: JumpStart Coalition.
Simon, H. A. (1947). Administration Behavior a study of Decision Making Processes in Administrative Organizations (1 st. ed). New York: The Macmillan Company.
Widoatmodj, S. (2007). The Right Way to Reach the Peak of Financial Prosperity Ala Robert T Kiyosaki. PT. Gramedia: Jakarta.
William & Richard. (1989). Risk Management and Insurance, Ed. 6. Mc. Grow-Hill Insurance Series, New York: McGraw-Hill.
Young, J. (2010). Financial Literacy and Stock Market Participation: Evidence from the Rand American Life Panel (October).
Journal:
Banks, J., Dea, C., & Oldfield, Z. (2011). Cognitive Function, Numeracy, and Retirement, Saving Trajectories. 120(548), https://doi.org/10.1111/j/17436109.2008.01122 .x. Endothelial.
Chen, H. & Volpe, R. (1998). An Analysis of Personal Financial Literacy Among College Students. Financial Services Review, 7(2), 107-128.
Christelis, D., Jappeli, T., & Padula, M. (2010). Cognitive Abilities and Portfolio Choice. European Economic Review, 54(1), 18-38. https://doi.org/10.16. Euroecorev. 2009.04001
Diacon, S. (2004). Investment Risk Perceptions. International Journal of Bank Marketing, 22(3), 180-199. http://dx.doi.org/10.1108/02652320410530304
Guiso, L., Sapienza, P., & Zingales, L. (2005). Trusting the Stock Market. Uber Working Paper, 11648.
Hsee & Weber. (1998). Cross-Cultural Differences in Risk Perception but Cross-Cultural Similarities in Attitudes Toward Perceived Risk. Management Science, 44(9), 1205 – 1217.
Lusardi & Mitchell. (2005). Financial Literacy and Retirement Planning in the United States.
Lusardi, A. (2007). Financial Literacy and Stock Market Participation. Journal Financial Literacy.
Lusardi, A., & Mitchell, O. S. (2007). Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth. Journal of Monetary Economics, 54, 205-224.
Mintzberg, H., Raisinghani, O., & Theoret, A. (1976). The Structure of Unstructured Decision Processes. Administrative Science Quarterly, 21, 246-275.
Rooij, M. V., Lusardi, A., & Alessie, R. (2007). Financial Literacy and Stock Market Participation. Journal of Financial Economics, 101(2). https://doi.org/10.3386/w13565.
Rooij, M. V., Lusardi, A., & Alessie, R. (2007). Financial Literacy, Retirement and Household Wealth. The Economic Journal, 122, 449–478. 10.1111/j.1468-0297.2012.02501.
Said, R. (2019). Investor's Behavior in Makassar Against Portfolio Investment Risk the Stock. International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), 2(1), 32- 40.
Huston, S. J. (2010). Measuring Financial Literacy. The Journal of Consumer Affairs, 44(2).
Servon, L. J., & Kaestner, R. (2008). Consumer Financial Literacy and the Impact of Online Banking on the Financial Behavior of Lower-Income Bank Customers. Journal of Consumer Affairs, 42(2), 271–305.
Wang, M., Keller, C., & Siegrist, M. (2011). The Less You Know, The More You Are Afraid of–A Survey on Risk Perceptions of Investment Products. Journal of Behavioral Finance, 12(1), 9-19.
