Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/337066 
Year of Publication: 
2025
Citation: 
[Journal:] Rajagiri Management Journal (RAMJ) [ISSN:] 2633-0091 [Volume:] 19 [Issue:] 4 [Year:] 2025 [Pages:] 266-288
Publisher: 
Emerald, Leeds
Abstract: 
This paper examines the impact of socio-economic and behavioral factors on determining the risk tolerance level of investors in the Bangladeshi stock market.To measure the effects of socioeconomic factors, investment behavior, attitude and knowledge, a chi-square test analysis, a Bayesian ordinal regression model (with convergence and posterior predictive checks) and a forest plot of regression coefficients were used.The findings reveal that investment attitudes, level of investment, education and risk attitudes are significant predictors of risk tolerance, with positive effects indicated by posterior estimates of 0.72, 1.00, 0.70 and 0.54, respectively, as shown by 95% credible intervals excluding zero. The regressions show a marginal negative relationship between income and risk tolerance, but marital status had no significant effect on risk tolerance. Gender is another factor, with males having a higher risk-taking tendency compared with females. Individuals with such attitudes typically fall into the category of moderate risk tolerance, which suggests a connection between their values, attitude toward long-term operations or active trading and moderate risk inclination.Practically, the paper can be used to further the actions of behavioral finance, as it outlines the subject of psychological and behavioral forces in risk-taking activities. This justifies the claim that significantly more effort within the field of financial promotion should be devoted to educating investors and modeling their attitudes rather than focusing solely on the significance of such a demographic variable.The study's originality lies in its multidimensional approach, advanced methodology and counterintuitive findings, challenging traditional risk tolerance models.
Subjects: 
Risk tolerance
Bayesian ordinal regression
Investment behavior
Investor psychology
Behavioral finance
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.