ETHOS

Volume 9 No. 1 January - June 2016

Pages : 73-86
ISSN : 0974 - 6706

Investors Socio Economic Profile

and Their Investment Pattern
Sarang Shankar Bhola, Priyanka Zanvar

Abstract:
In recent times, the investment companies have emerged as the most dynamic segment in the Indian
financial system. Reforms in the Indian economic system and the opening up of the economy have been
the reasons for the tremendous growth in the Indian capital market. This study analyzes the impact of
socio economic variables on the attitude of investors towards investments. To achieve, 770 respondents
of Pune city, having different socio economic profiles were surveyed. The results also highlight that
certain factors like education level, awareness about the financial system, age of invertors etc make
significant impact while deciding on the investment patterns for investment. Further, it is observed that
the level of income also influences the investment decisions. Higher income group shows relatively high
preference towards investment in risky Investment avenues, conversely lower and average income group
shows keen preference towards insurance and banks as the most preferred investment avenues.

Keywords : Socio Economic Class, Investment Pattern, Guiding Factors, Sources of Information.

Introduction : some deposit schemes with banks or post office

Until the decade of the 90's, most of the middle or companies which would ensure them regular
class Indians were paying little attention to monthly or quarterly returns. A very small
managing personal finance during their working percentage investors would experiment in stock
life span and only at the time of retirement they markets or UTI schemes.
would consult their well wishers or advisors about With the advent of the new millennium, needs have
multiplied and changed and so have the solutions.
Sarang S. Bhola Now a day, Investments have become a basic
(MBA., Ph.D.) necessity for everyone. In our country there is a rapid
Associate Professor growth in investment. More number of investors is
Karmaveer Bhaurao Patil Institute of investing their funds in different types of investment
Management Studies and Research, opportunities. Investing wisely is a function if
Satara - 415 001. Maharashtra, India investors' specific needs and goals. Each investor has
different objectives that need to be met depending
Priyanka Zanvar on age, income and attitude towards risk. Investors
(MBA., M.Phil.) have to work out with their investment profile to
Assistant Professor, determine which investments are right for them and
Institute of Industrial & Computer should consider important factors such as personal
Management and Research, Pune 44 status, plans and constraints.

Investors Socio Economic Profile and Their Investment Pattern 73

Electronic copy available at: http://ssrn.com/abstract=2748887

Review of Literature and Research Gap: about investment options and risks are high among
Mukhi, (1989) has revealed that NSC has been one old aged, highly educated and those who are
of the most popular tax savings instruments in this professionals by occupation. Demographic
country. He has stated that contractor and others variables such as age and education do not have
who have to provide security while bidding for significant influence over investor awareness
contracts finds it extremely convenient to buy NSC where as difference in occupational status leads
and pledge these to the appropriate authorities to difference in the awareness level of people.
while earning 12 per cent per annum on the Love D.A (2010) investigated the impact of
pledged securities. He also stated that the major demographic shocks on optimal decisions about
attraction of NSC is its simplicity. Even the savings, life insurance and most certainly assets
average investor does not have to scratch his head allocation and found that marital status transitions
to understand the scheme. could have important effects on optimal household
Guiso, Jappelli and Terlizzese (1996), Bajtelsmit decisions, particularly in the cases of widowhood
and VenDerhei (1997), Powell and Ansic (1997), and divorcee. He also found that children also play
Jianakoplos and Bernasek (1998), Hariharan, a fundamental role in portfolio choice, and the
Chapman and Domain (2000), Hartog, Ferrer- literature on optimal portfolio choice over the life
ICarbonell and Jonker (2002) concluded that males cycle has focused on the roles of housing costs
are more risk tolerant than females. Rajarajan. V. and background risks due to labor income. His
(2003) studies brought out the existence of strong empirical evidence shows that divorce and
association between demographic characteristics widowhood have particularly strong effects on
and the risk bearing capacity of Indian investors, allocations, and that these effects differ significantly
the relationship between age, income and risk by gender, age and number of children.
bearing capacity of the investors are very high. Rajarajen Vanjeko (2010) individual investors are
The salaried members constituted the largest part the backbone of the capital market. The growth of
of all categories. the capital market during the last few years has
Sharma. B.C. and Sharma Dinesh's (2004) research substantially increased the investor population in
paper explores the literature and points out that our country. The investment scene has undergone
stock investment activity by retail investors is very a sea change. This context necessitates an
low in India. This paper studied about retail understanding of the characteristics of investors
investor's investment patterns behavior and in terms of their investments, strategies,
attitudes that they hold about stock investing in expectations etc. this paper presents some
the context is of small emerging market of Jammu. interesting information on this line on the basis of
The result of the study showed that profile of retail information collected from over thousand
investor as young, well informed and also regular individual investors from eleven cities of India.
traders. However, they hold moderately low belief This study suggests the use of these characteristics
towards stock market Institution's regulatory for a better understanding of individual investors
capabilities and towards safety of small investor. and their financial product needs. It also shows
V.L shobhana and J.Jayalakshmi in their study investor's future investment preferences. The study
titled 'investor Awareness and Preference. A study" reveals the increasing popularity of equity as an
(2005) has examined the level of investor investment option among individual investors.
awareness regarding investment options and In India the research in behavioral finance is
investment risks. The analysis revealed that gaining attention of researchers. The researchers
investment in real estate/property is preferred by have been studying this subject from different
majority of the respondents. The second most perspectives. From the review it can be
preferred investment is bank deposits. Awareness prominently pointed out that researchers have

74 ETHOS Volume 9 Number 1 January - June 2016

Electronic copy available at: http://ssrn.com/abstract=2748887

approached this subject from macro perspective 2. To understand Objectives behind investment
and tried to generalize the results. There is a need decision making.
to explore the subject further at macro level on 3. To determine guiding factors which influence
the basis of different dimensions to facilitate investment decision Making.
thinking at micro level. One approach to look at 4. To understand the sources of information for
investment pattern of investors is to examine investment availed by respondents from
investment as per investor's Socia Economic Class. different Socio Economic Classes.
This study is an attempt in this direction.
Structured Schedule was used to collect primary
Concept of Socio Economic Class (SEC): data. It was divided into five parts. The structures
In a bid to keep pace with the fast-evolving were Percentage of existing investment and future
economic outlook, consumer attitudes and preferences, Objectives behind Investment,
preferences in the country, the Media Research Guiding Factors, Sources of information availed
Users' Council (MRUC) and the Market Research and demographic profile of sample respondents.
Society of India (MRSI) recently unveiled a new
Socio-Economic Classification (SEC) system, The scope of the research was the metropolitan
city of Pune. Stratified convenient sampling
under which all Indian households will be now
technique was used to draw sample from
classified.
population. Stratification is done on the basis
The New SEC is based on Educational Socio-economic Classes. These Socio-economic
Qualifications of the chief wage owner in the Classes are defined on the basis of number of
household; and the Number of Assets Owned (out household items owned and educational
of a pre-specified list of 11 assets). The socio- qualification. Samples from all groups were
economic classification is then segregated into 12 approached conveniently. Total sample Size was
groups based on inputs on these 2 parameters - 670. Collected data are classified using electronic
A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2 and spread sheet; Various statistical tools like Rank,
E3. These 12 groups are applicable to both urban Spearman rank correlation , Paired Sample 't' test,
and rural India. ANOVA, are used to analyze the data.
Research Methodology: Data Analysis and Discussions:
Present study is based on Empirical Research. It deals with Investment pattern of sample
Present research work is set to study following respondents on the basis of Socio Economic Class.
objectives. Spearman rank correlation between Existing
Investment, Future Investment Preferences,
1. To study Existing and Future investment pattern
Objectives behind Investment, Guiding Factors
of respondents on the basis of Socio Economic
behind investment and Sources of Information
Classes.
availed by sample respondents are discussed .

Investors Socio Economic Profile and Their Investment Pattern 75

76
Table 1: Spearman Rank Correlation between Socio Economic Classes and Existing Investments (n-770)
S.N Particulars A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
1 A1 Correlation Coefficient 1.000 .897 .980 .931 .676 .664 .724 .455 .529 .203 .922 .710
Sig. (2-tailed) . .000 .000 .000 .000 .000 .000 .022 .007 .329 .000 .000
2 A2 Correlation Coefficient .897 1.000 .853 .913 .767 .774 .756 .601 .635 .436 .808 .814
Sig. (2-tailed) .000 . .000 .000 .000 .000 .000 .001 .001 .029 .000 .000
3 A3 Correlation Coefficient .980 .853 1.000 .909 .658 .648 .701 .414 .511 .175 .908 .679
Sig. (2-tailed) .000 .000 . .000 .000 .000 .000 .040 .009 .402 .000 .000
4 B1 Correlation Coefficient .931 .913 .909 1.000 .742 .725 .765 .574 .632 .425 .913 .830
Sig. (2-tailed) .000 .000 .000 . .000 .000 .000 .003 .001 .034 .000 .000
5 B2 Correlation Coefficient .676 .767 .658 .742 1.000 .828 .853 .832 .859 .661 .733 .840
Sig. (2-tailed) .000 .000 .000 .000 . .000 .000 .000 .000 .000 .000 .000
6 C1 Correlation Coefficient .664 .774 .648 .725 .828 1.000 .888 .827 .791 .649 .693 .872
Sig. (2-tailed) .000 .000 .000 .000 .000 . .000 .000 .000 .000 .000 .000
7 C2 Correlation Coefficient .724 .756 .701 .765 .853 .888 1.000 .723 .759 .531 .803 .913
ETHOS Volume 9 Number 1 January - June 2016

Sig. (2-tailed) .000 .000 .000 .000 .000 .000 . .000 .000 .006 .000 .000
8 D1 Correlation Coefficient .455 .601 .414 .574 .832 .827 .723 1.000 .804 .864 .516 .739
Sig. (2-tailed) .022 .001 .040 .003 .000 .000 .000 . .000 .000 .008 .000
9 D2 Correlation Coefficient .529 .635 .511 .632 .859 .791 .759 .804 1.000 .677 .645 .820
Sig. (2-tailed) .007 .001 .009 .001 .000 .000 .000 .000 . .000 .000 .000
10 E1 Correlation Coefficient .203 .436 .175 .425 .661 .649 .531 .864 .677 1.000 .283 .661
Sig. (2-tailed) .329 .029 .402 .034 .000 .000 .006 .000 .000 . .170 .000
11 E2 Correlation Coefficient .922 .808 .908 .913 .733 .693 .803 .516 .645 .283 1.000 .765
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .008 .000 .170 . .000
12 E3 Correlation Coefficient .710 .814 .679 .830 .840 .872 .913 .739 .820 .661 .765 1.000
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .
Source: (Compiled by Researcher)
Table 1 reveals that there is significant difference between existing investment pattern of SEC E1 and SEC A1, A3, B1and E2. There is
moderate significance found between SEC D2 and SEC A1 and A3. Between SEC E1 and SEC A2 and B1, there is moderate significance
between existing investments of respondents.
 Following table shows spearman rank correlation between future preferences of investment pattern.
Investors Socio Economic Profile and Their Investment Pattern Table 2: Spearman Rank Correlation between Socio Economic Classes and Future Preferred Investment (n-770)
S.N Particulars A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
1 A1 Correlation Coefficient 1.000 .741** .917** .901** .948** .645** .707** .779** .831** .732** .706** .612**
Sig. (2-tailed) . .000 .000 .000 .000 .001 .000 .000 .000 .000 .000 .001
2 A2 Correlation Coefficient .741** 1.000 .706** .763** .804** .645** .676** .749** .717** .728** .621** .605**
Sig. (2-tailed) .000 . .000 .000 .000 .000 .000 .000 .000 .000 .001 .001
3 A3 Correlation Coefficient .917** .706** 1.000 .905** .939** .629** .679** .762** .817** .724** .669** .558**
Sig. (2-tailed) .000 .000 . .000 .000 .001 .000 .000 .000 .000 .000 .004
4 B1 Correlation Coefficient .901** .763** .905** 1.000 .971** .690** .762** .847** .836** .769** .703** .676**
Sig. (2-tailed) .000 .000 .000 . .000 .000 .000 .000 .000 .000 .000 .000
5 B2 Correlation Coefficient .948** .804** .939** .971** 1.000 .741** .804** .890** .895** .832** .777** .713**
Sig. (2-tailed) .000 .000 .000 .000 . .000 .000 .000 .000 .000 .000 .000
6 C1 Correlation Coefficient .645** .645** .629** .690** .741** 1.000 .883** .863** .817** .776** .704** .782**
Sig. (2-tailed) .001 .000 .001 .000 .000 . .000 .000 .000 .000 .000 .000
7 C2 Correlation Coefficient .707** .676** .679** .762** .804** .883** 1.000 .949** .902** .934** .893** .903**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 . .000 .000 .000 .000 .000
8 D1 Correlation Coefficient .779** .749** .762** .847** .890** .863** .949** 1.000 .943** .948** .899** .877**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 . .000 .000 .000 .000
9 D2 Correlation Coefficient .831** .717** .817** .836** .895** .817** .902** .943** 1.000 .921** .866** .808**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000 . .000 .000 .000
10 E1 Correlation Coefficient .732** .728** .724** .769** .832** .776** .934** .948** .921** 1.000 .947** .868**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000 .000 . .000 .000
11 E2 Correlation Coefficient .706** .621** .669** .703** .777** .704** .893** .899** .866** .947** 1.000 .892**
Sig. (2-tailed) .000 .001 .000 .000 .000 .000 .000 .000 .000 .000 . .000
12 E3 Correlation Coefficient .612** .605** .558** .676** .713** .782** .903** .877** .808** .868** .892** 1.000
Sig. (2-tailed) .001 .001 .004 .000 .000 .000 .000 .000 .000 .000 .000 .
Source: (Compiled by Researcher)
Table 2 reveals that spearman rank correlation between future investment pattern of sample respondents on the basis of SEC are correlated.
77

Moderate correlation found between SEC E3 and SEC A1, A2, A3 and B1. Also there is moderate correlation found in SEC E2 and SEC A2 and A3.
 Following table shows spearman rank correlation between objectives behind investment.

78
Table 3: Spearman Rank Correlation between Objectives behind Investment (n-770)
S.N Particulars A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
1 A1 Correlation Coefficient 1.000 .824 .717 .851 .855 .719 .618 .587 .334 .292 .350 .282
Sig. (2-tailed) . .000 .004 .000 .000 .004 .018 .027 .243 .311 .220 .329
2 A2 Correlation Coefficient .824 1.000 .713 .877 .727 .776 .748 .794 .662 .543 .640 .453
Sig. (2-tailed) .000 . .004 .000 .003 .001 .002 .001 .010 .045 .014 .104
3 A3 Correlation Coefficient .717 .713 1.000 .898 .836 .862 .750 .696 .585 .488 .553 .412
Sig. (2-tailed) .004 .004 . .000 .000 .000 .002 .006 .028 .076 .040 .143
4 B1 Correlation Coefficient .851 .877 .898 1.000 .873 .877 .752 .719 .583 .464 .581 .425
Sig. (2-tailed) .000 .000 .000 . .000 .000 .002 .004 .029 .095 .029 .130
5 B2 Correlation Coefficient .855 .727 .836 .873 1.000 .934 .838 .748 .526 .495 .524 .502
Sig. (2-tailed) .000 .003 .000 .000 . .000 .000 .002 .053 .072 .055 .068
6 C1 Correlation Coefficient .719 .776 .862 .877 .934 1.000 .911 .838 .704 .604 .609 .528
Sig. (2-tailed) .004 .001 .000 .000 .000 . .000 .000 .005 .022 .021 .052
7 C2 Correlation Coefficient .618 .748 .750 .752 .838 .911 1.000 .844 .754 .642 .687 .683
ETHOS Volume 9 Number 1 January - June 2016

Sig. (2-tailed) .018 .002 .002 .002 .000 .000 . .000 .002 .013 .007 .007
8 D1 Correlation Coefficient .587 .794 .696 .719 .748 .838 .844 1.000 .923 .893 .854 .738
Sig. (2-tailed) .027 .001 .006 .004 .002 .000 .000 . .000 .000 .000 .003
9 D2 Correlation Coefficient .334 .662 .585 .583 .526 .704 .754 .923 1.000 .906 .822 .685
Sig. (2-tailed) .243 .010 .028 .029 .053 .005 .002 .000 . .000 .000 .007
10 E1 Correlation Coefficient .292 .543 .488 .464 .495 .604 .642 .893 .906 1.000 .854 .779
Sig. (2-tailed) .311 .045 .076 .095 .072 .022 .013 .000 .000 . .000 .001
11 E2 Correlation Coefficient .350 .640 .553 .581 .524 .609 .687 .854 .822 .854 1.000 .861
Sig. (2-tailed) .220 .014 .040 .029 .055 .021 .007 .000 .000 .000 . .000
12 E3 Correlation Coefficient .282 .453 .412 .425 .502 .528 .683 .738 .685 .779 .861 1.000
Sig. (2-tailed) .329 .104 .143 .130 .068 .052 .007 .003 .007 .001 .000 .
(Source : Compiled by Researcher)
Table 3 reveals that spearman rank correlation between objectives behind investment on the basis of SEC are correlated. Difference found
in objectives behind investment of SEC A1 and SEC D2, E1, E2 and E3. Moderate correlation found between SEC E1 and SEC A3, B1 and
B2. Also there is moderate correlation found in SEC E2 and SEC A2 and A3.
 Following table shows spearman rank correlation between guiding factors behind investment.
Investors Socio Economic Profile and Their Investment Pattern Table 4: Spearman Rank Correlation between Guiding Factors Behind Investment (n-770)
S.N Particulars A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
1 A1 Correlation Coefficient 1.000 .922** .975** .970** .931** .861** .864** .783** .768** .750** .711** .647**
Sig. (2-tailed) . .000 .000 .000 .000 .000 .000 .001 .001 .001 .003 .009
2 A2 Correlation Coefficient .922** 1.000 .944** .942** .974** .955** .922** .843** .847** .803** .713** .628*
Sig. (2-tailed) .000 . .000 .000 .000 .000 .000 .000 .000 .000 .003 .012
3 A3 Correlation Coefficient .975** .944** 1.000 .955** .956** .904** .871** .765** .739** .704** .621* .570*
Sig. (2-tailed) .000 .000 . .000 .000 .000 .000 .001 .002 .003 .013 .026
4 B1 Correlation Coefficient .970** .942** .955** 1.000 .954** .851** .852** .821** .807** .751** .712** .621*
Sig. (2-tailed) .000 .000 .000 . .000 .000 .000 .000 .000 .001 .003 .013
5 B2 Correlation Coefficient .931** .974** .956** .954** 1.000 .914** .887** .814** .813** .758** .679** .589*
Sig. (2-tailed) .000 .000 .000 .000 . .000 .000 .000 .000 .001 .005 .021
6 C1 Correlation Coefficient .861** .955** .904** .851** .914** 1.000 .965** .825** .826** .844** .713** .651**
Sig. (2-tailed) .000 .000 .000 .000 .000 . .000 .000 .000 .000 .003 .009
7 C2 Correlation Coefficient .864** .922** .871** .852** .887** .965** 1.000 .861** .882** .932** .825** .761**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 . .000 .000 .000 .000 .001
8 D1 Correlation Coefficient .783** .843** .765** .821** .814** .825** .861** 1.000 .976** .869** .799** .787**
Sig. (2-tailed) .001 .000 .001 .000 .000 .000 .000 . .000 .000 .000 .000
9 D2 Correlation Coefficient .768** .847** .739** .807** .813** .826** .882** .976** 1.000 .918** .886** .858**
Sig. (2-tailed) .001 .000 .002 .000 .000 .000 .000 .000 . .000 .000 .000
10 E1 Correlation Coefficient .750** .803** .704** .751** .758** .844** .932** .869** .918** 1.000 .946** .860**
Sig. (2-tailed) .001 .000 .003 .001 .001 .000 .000 .000 .000 . .000 .000
11 E2 Correlation Coefficient .711** .713** .621* .712** .679** .713** .825** .799** .886** .946** 1.000 .933**
Sig. (2-tailed) .003 .003 .013 .003 .005 .003 .000 .000 .000 .000 . .000
12 E3 Correlation Coefficient .647** .628* .570* .621* .589* .651** .761** .787** .858** .860** .933** 1.000
Sig. (2-tailed) .009 .012 .026 .013 .021 .009 .001 .000 .000 .000 .000 .
(Source: Compiled by Researcher)
Table 4 reveals that spearman rank correlation between guiding factors behind investment on the basis of SEC are correlated. Moderate
79

correlation found between SEC E3 and SEC A1, A2, A3, B1, B2 and C1.
 Following table shows spearman rank correlation between Sources of information availed by sample respondents.

80 Table 5: Spearman Rank Correlation between Sources of Information Availed (n-770)

S.N Particulars A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
1 A1 Correlation Coefficient 1.000 .926** .966** .936** .933** .775** .744** .631** .620** .693** .668** .623**
Sig. (2-tailed) . .000 .000 .000 .000 .000 .001 .007 .008 .002 .003 .008
2 A2 Correlation Coefficient .926** 1.000 .914** .924** .926** .830** .820** .740** .679** .774** .668** .600*
Sig. (2-tailed) .000 . .000 .000 .000 .000 .000 .001 .003 .000 .003 .011
3 A3 Correlation Coefficient .966** .914** 1.000 .958** .955** .792** .779** .677** .669** .730** .713** .663**
Sig. (2-tailed) .000 .000 . .000 .000 .000 .000 .003 .003 .001 .001 .004
4 B1 Correlation Coefficient .936** .924** .958** 1.000 .978** .867** .866** .783** .765** .834** .796** .755**
Sig. (2-tailed) .000 .000 .000 . .000 .000 .000 .000 .000 .000 .000 .000
5 B2 Correlation Coefficient .933** .926** .955** .978** 1.000 .879** .886** .818** .801** .854** .833** .777**
Sig. (2-tailed) .000 .000 .000 .000 . .000 .000 .000 .000 .000 .000 .000
6 C1 Correlation Coefficient .775** .830** .792** .867** .879** 1.000 .940** .910** .917** .932** .863** .855**
Sig. (2-tailed) .000 .000 .000 .000 .000 . .000 .000 .000 .000 .000 .000
7 C2 Correlation Coefficient .744** .820** .779** .866** .886** .940** 1.000 .943** .912** .975** .937** .881**
ETHOS Volume 9 Number 1 January - June 2016

Sig. (2-tailed) .001 .000 .000 .000 .000 .000 . .000 .000 .000 .000 .000
8 D1 Correlation Coefficient .631** .740** .677** .783** .818** .910** .943** 1.000 .968** .975** .889** .849**
Sig. (2-tailed) .007 .001 .003 .000 .000 .000 .000 . .000 .000 .000 .000
9 D2 Correlation Coefficient .620** .679** .669** .765** .801** .917** .912** .968** 1.000 .958** .894** .888**
Sig. (2-tailed) .008 .003 .003 .000 .000 .000 .000 .000 . .000 .000 .000
10 E1 Correlation Coefficient .693** .774** .730** .834** .854** .932** .975** .975** .958** 1.000 .943** .916**
Sig. (2-tailed) .002 .000 .001 .000 .000 .000 .000 .000 .000 . .000 .000
11 E2 Correlation Coefficient .668** .668** .713** .796** .833** .863** .937** .889** .894** .943** 1.000 .975**
Sig. (2-tailed) .003 .003 .001 .000 .000 .000 .000 .000 .000 .000 . .000
12 E3 Correlation Coefficient .623** .600* .663** .755** .777** .855** .881** .849** .888** .916** .975** 1.000
Sig. (2-tailed) .008 .011 .004 .000 .000 .000 .000 .000 .000 .000 .000 .
(Source: Compiled by Researcher)
Table 5 reveals that spearman rank correlation between Sources of Information availed by sample respondents on the basis of SEC are
correlated. Moderate correlation found between SEC E3 and SEC A1, A2, and A3. Also there is moderate correlation found between SEC
E2 and SEC A1, A2.
Analysis of Existing Investment in Investment Instruments:
Following table shows ANOVA testing of investment instruments according to socio economic class of
respondents. ANOVA is calculated on the Existing Investments of the respondents. The data for existing
investment is normalized.
Table 6: ANOVA Testing of Investment Instruments
(n-710)
ANOVA
S. Sum of df Mean F Sig.
N. Squares Square
1 NSC Between Groups 503.14 11 45.740 3.219 .000
Within Groups 9918.02 698 14.209
Total 10421.16 709
2 PPF Between Groups 5099.60 11 463.600 4.110 .000
Within Groups 78741.95 698 112.811
Total 83841.55 709
3 Bank Fixed Between Groups 119926.51 11 10902.410 17.882 .000
Deposits Within Groups 425572.65 698 609.703
Total 545499.15 709
4 PO Schemes Between Groups 12148.19 11 1104.380 11.032 .000
Within Groups 69877.31 698 100.111
Total 82025.49 709
5 Govt Between Groups 400.15 11 36.377 1.572 .102
Securities Within Groups 16155.10 698 23.145
Total 16555.25 709
6 Insurance Between Groups 8490.13 11 771.830 2.609 .003
Within Groups 206486.66 698 295.826
Total 214976.80 709
7 Mutual Funds Between 8Groups 4162.08 11 378.371 9.554 .000
Within Groups 27644.40 698 39.605
Total 31806.48 709
8 ELSS Between Groups 115.78 11 10.525 2.749 .002
Within Groups 2672.11 698 3.828
Total 2787.89 709
9 Debentures Between Groups 156.79 11 14.254 1.718 .065
Within Groups 5789.82 698 8.295
Total 5946.62 709
10 Bonds Between Groups 1080.32 11 98.211 7.524 .000
Within Groups 9111.23 698 13.053
Total 10191.55 709

Investors Socio Economic Profile and Their Investment Pattern 81

S. Sum of df Mean F Sig.
N. Squares Square
11 Gold Between Groups 8470.92 11 770.084 6.418 .000
Within Groups 83755.87 698 119.994
Total 92226.80 709
12 Company Between Groups 155.74 11 14.158 2.205 .013
Deposits Within Groups 4482.15 698 6.421
Total 4637.89 709
13 SIP Between Groups 1351.27 11 122.843 2.145 .016
Within Groups 39977.04 698 57.274
Total 41328.31 709
14 ULIP Between Groups 342.91 11 31.173 3.748 .000
Within Groups 5804.98 698 8.317
Total 6147.89 709
15 Commodity Between Groups 441.99 11 40.180 5.551 .000
Market Within Groups 5051.99 698 7.238
Total 5493.98 709
16 NBFC Between Groups 5.50 11 .500 1.799 .051
Within Groups 193.94 698 .278
Total 199.44 709
17 Livestock Between Groups 3330.02 11 302.729 4.276 .000
18Within Gr19oups 49415.56 698 70.796
Total 52745.58 709
18 Real Estate Between Groups 2266.63 11 206.057 3.515 .000
Within Groups 40923.57 698 58.630
Total 43190.19 709
19 Chit Funds Between Groups 5914.54 11 537.686 2.198 .013
Within Groups 170721.94 698 244.587
Total 176636.48 709
20 Shares Between Groups 4363.91 11 396.719 7.765 .000
Within Groups 35660.88 698 51.090
Total 40024.79 709
21 Forex Market Between Groups 40.45 11 3.678 1.336 .200
Within Groups 1921.83 698 2.753
Total 1962.29 709
22 Private Equity Between Groups 4.81 11 .437 .889 .551
Within Groups 342.94 698 .491
Total 347.75 709

82 ETHOS Volume 9 Number 1 January - June 2016

 S. Sum of df Mean F Sig.
N. Squares Square
23 Credit Between Groups 12600.16 11 1145.469 6.448 .000
Society Within Groups 123994.52 698 177.643
Total 136594.68 709
24 Any Others Between Groups 6172.06 11 561.097 5.056 .000
Within Groups 77462.58 698 110.978
Total 83634.65 709
(Source: Compiled by Researcher)
Table 6 shows that Kruskal Wallis test is significant with investment instruments namely NSC, PPF,
Bank Deposits, PO Schemes, Insurance, Mutual Funds, ELSS, Bonds, Gold/Silver, Company Deposits,
SIP, ULIP, Commodity, Live Stock, Real Estate, Chit Funds, Shares, and Credit Society. These instruments
are significant at 95% confidence level. It means that above mentioned investment instruments show
significant difference between different Socio Economic Classes.
Above test results are cross verified with Kruskal Wallis test.
Table 7: Kruskal Wallis Test between Investment Instruments
(n-710)
S.N Investment Avenues Chi-Square d.f Asymp. Sig.
1 NSC 36.35 11 0.00
2 PPF 61.80 11 0.00
3 Bank Fixed Deposits 139.93 11 0.00
4 PO Schemes 110.25 11 0.00
5 Government Securities 25.56 11 0.01
6 Insurance 75.76 11 0.00
7 Mutual Funds 127.53 11 0.00
8 ELSS 35.67 11 0.00
9 Debentures 25.53 11 0.01
10 Bonds 84.72 11 0.00
11 Gold/ Silver 80.09 11 0.00
12 Company Deposits 25.19 11 0.01
13 Systematic Investment Plan 53.89 11 0.00
14 ULIP 40.17 11 0.00
15 Commodity Market 60.59 11 0.00
16 NBFC Schemes 19.54 11 0.05
17 Live Stock 55.94 11 0.00
18 Real Estate 57.48 11 0.00
19 Chit Funds 15.34 11 0.17
20 Shares 108.96 11 0.00

Investors Socio Economic Profile and Their Investment Pattern 83

 S.N Investment Avenues Chi-Square d.f Asymp. Sig.
21 Forex Market 11.67 11 0.39
22 Private Equity Investments 10.68 11 0.47
23 Credit Society 51.69 11 0.00
24 Any Other 33.38 11 0.00
(Source: Compiled by Researcher)
Table 7 shows that Kruskal Wallis test is significant with investment instruments namely NSC, PPF,
Bank Deposits, PO Schemes, Govt. Securities, Insurance, Mutual Funds, ELSS, Debentures, Bonds,
Gold / Silver, Company Deposits, SIP, ULIP, Commodity, NBFC Schemes, Live Stock, Real Estate,
Shares, and Credit Society. These instruments are significant at 95% confidence level. It means that
there is significant difference between above mentioned investment instruments on the basis of Socio
Economic Classes.
Following part shows classification of investment avenues on the basis of risk level. They are classified
safer investment avenues and Riskier investment avenues.
Safe Investment avenues are NSC, PPF, Bank deposits, PO Schemes, Insurance, and Government
Securities.
Following table shows ANOVA test between safer investment avenues and Socio Economic Classes.
Table 8: ANOVA Test between Safer Investment Avenues and Socio Economic Class
(n-710)
ANOVA
Safer Investment avenues
Sum of Squares df Mean Square F Sig.
Between Groups 433.452 11 39.405 .167 .999
Within Groups 14140.504 60 235.675
Total 14573.956 71
Source (Compiled by Researcher)
Table 8 shows that there is no significant difference between safer investment avenues on the basis of
Socio Economic Class.
Similarly, following table narrates ANOVA Testing between riskier investment avenues.
Table 9: ANOVA Test between Safer Investment Avenues and Socio Economic Class
(n-710)
ANOVA
Risky
Sum of Squares df Mean Square F Sig.
Between Groups 140.42 11 12.766 .756 .683
Within Groups 3646.54 216 16.882
Total 3786.97 227
Source (Compiled by Researcher)

84 ETHOS Volume 9 Number 1 January - June 2016

Table 9 shows that there is no significant difference avenues and there is no significant difference
between riskier investment avenues on the basis between riskier investment avenues. (Table 8 and
of Socio Economic Class. Table 9)
Findings: Suggestions:
Spearman Rank Correlation reveals that there is Marketers of financial products should target all
significant difference between existing investment Socio Economic classes of the economy.
pattern of SEC E1 and SEC A1, A3, B1and E2. There While targeting investors from lower Socio
is moderate significance found between SEC D2 and
Economic Classes, Service providers should focus
SEC A1 and A3. Between SEC E1 and SEC A2 and on designing products for the specific needs of the
B1, there is moderate significance between existing poor. The products should be low cost in order to
investments of respondents. (Table 1) increase take-up, and, where trade-offs must be
Future investment pattern of sample respondents made, low fees are more important than high
on the basis of SEC are correlated. Moderate interest rates. Marketers have to offer a range of
correlation found between SEC E3 and SEC A1, products specifically designed to help people save
A2, A3 and B1. Also there is moderate correlation for multiple purposes and to cope with
found in SEC E2 and SEC A2 and A3. (Table 2) emergencies. Also financial service providers' can
Spearman rank correlations between objectives facilitate access to accounts by subsidizing fees
behind investment on the basis of SEC are correlated. and offering add-on services like reminders to
Difference found in objectives behind investment of save.
SEC A1 and SEC D2, E1, E2 and E3. Moderate Investors from middle Socio Economic Classes
correlation found between SEC E1 and SEC A3, B1 have major objectives as tax planning, retirement
and B2. Also there is moderate correlation found in planning and financing children's education.
SEC E2 and SEC A2 and A3. (Table 3) Therefore, by considering these objectives,
Guiding factors behind investment on the basis of marketers have to offer a range of products to
SEC are correlated. Moderate correlation found encourage household savings. While offering
between SEC E3 and SEC A1, A2, A3, B1, B2 investment products, company should make people
and C1. (Table 4) aware about the various investment options
available in the market. Every client should be
Sources of Information availed by sample given a personnel assistance to give him/her a
respondents on the basis of SEC are correlated. regular & consistent service.
Moderate correlation found between SEC E3 and
SEC A1, A2, and A3. Also there is moderate While targeting investors from higher Socio
correlation found between SEC E2 and SEC A1, Economic Classes, service providers should focus
A2. (Table 5) on diversified portfolio. Companies have to target
their best customers, form close, personal
On the basis of Investment instruments, ANOVA relationships with them, and give them what they
model is significant with investment instruments want i.e called Customized product.
namely NSC, PPF, Bank Deposits, PO Schemes,
Insurance, Mutual Funds, ELSS, Bonds, Gold/ Therefore, marketers have to understand these
Silver, Company Deposits, SIP, ULIP, Commodity, factors and accordingly target the customers.
Live Stock, Real Estate, Chit Funds, Shares, and Conclusion:
Credit Society. (Table 6 and Table 7) The study on people's choice in Investment
Choices has been undertaken with the objective,
In the process of classification of investment into
to analyze the investment pattern of investors on
safer and riskier investment avenues, there is no
the basis of Socio Economic Classes. Respondents
significant difference between safer investment

Investors Socio Economic Profile and Their Investment Pattern 85

from all the Socio Economic Classes give more Love, D.A. (2010). The effects of marital status
preference to invest in Insurance, NSC, PPF and and children on savings and portfolio choice. The
Bank Deposit. Income level of a respondent is also Review of Financial Studies, 23(1), 385-431.
an important factor which affects portfolio of the Mukhi M.D. (1989) NSCs. A saving grace',
respondent. Middle age group, Lower income level Business World, 6-19 December. Pp. 107- 120. 4.
groups respondents are preferred to invest in
Insurance, NSC, PPF and bank deposit rather than Rajarajan.V (2003); Investors Demographics and
any other investment avenues. The purpose of this risk bearing capacity; Finance India; 17(2),
study was to determine investment patterns on the pp.565-576,
basis of Socio Economic Class of investors. These Rajarajen Vanjeko (2010); Indian Investors'
type of studies are becoming roadmap to marketer Investment Characteristics; Indian Institute of
of Financial instruments to design their investment Finance, Vol.4, No.3&4, pp.1274-1294.
products.
Sharma.B.C and Sharma Dinesh's (2004); An
References : empirical study of stock investment behaviour in
Guiso, L., Jappelli, T., & Terlizzese, D.(1996). Income Jammu-An emerging market; Indian Journal of
risk, borrowing Constraints, and portfolio choice. Finance and Research; Vol 14,Issue;1and2.
American Economic Review. 86(1), 158- 172.

86 ETHOS Volume 9 Number 1 January - June 2016

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Investors Socio Economic Profile and Their Investment Pattern 87