Individual investor's investment choice in Tanzania Online publication date: Mon, 30-Dec-2024
by Dorika Jeremiah Mwamtambulo
African J. of Accounting, Auditing and Finance (AJAAF), Vol. 9, No. 1, 2025
Abstract: The choice for a particular investment is obscured by the number of investments available in the market. In choosing an investment, individual households consider factors related to the household and individual asset characteristics. The current study examined such factors from the perspective of individual households in Tanzania. Data was collected from a sample of 1,120 households participating in investment activities in Tanzania while the multinomial logit model was adopted for the analysis. Factors of occupation, income, risk-taking, irrational behaviours (representative bias, anchoring) and asset availability attributed to taking up risky assets with risk aversion tendencies, overconfidence, anchoring and loss aversion behaviours attributing to taking up less risky assets. The results narrate the importance of integrating both individual assets and household characteristics in selecting an investment. It further calls for an education policy on investment decisions and the availability of information relevant to making investment decisions.
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