Presenters: Mega Noerman Ningtyas, Maretha Ika Prajawati, Misbahul Munir
Affiliation: UIN Maulana Malik Ibrahim Malang
Room: 1
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, researchers Mega Noerman Ningtyas, Maretha Ika Prajawati, and Misbahul Munir from UIN Maulana Malik Ibrahim Malang presented their compelling study titled “Understanding Gen Z Investment Decision through The Role of Financial Literacy and Cognitive Bias.” This research delves into how financial literacy and cognitive biases shape investment decisions among Generation Z investors in Indonesia.
Employing a positive epistemology and a cross-sectional descriptive survey design, the study gathered data from 229 respondents via an online questionnaire. The analysis, conducted using the Structural Equation Model-Partial Least Squares (SEM-PLS) method, aimed to test the proposed hypotheses regarding the influence of financial literacy and cognitive biases on investment decisions.
The findings reveal a significant relationship between financial literacy, cognitive biases, and investment decisions among Gen Z investors. Higher levels of financial literacy correlate with more rational and informed investment choices. However, cognitive biases, specifically hindsight bias and the illusion of control, also strongly affect these investment decisions. These biases can lead to overconfidence and errors in judgment, impacting the financial outcomes for young investors.
The results of this study underscore the critical need for targeted financial education programs tailored to Gen Z investors. By addressing cognitive biases and enhancing financial literacy, these programs can help mitigate the adverse effects and promote more rational investment behaviors.
The presentation in Room 1 at ICIES 2024 highlighted the importance of understanding the psychological factors influencing investment decisions among the younger generation. The researchers’ insights provide valuable contributions to developing effective financial education strategies, ensuring that Gen Z investors are better equipped to navigate the complexities of the financial market.