Risk Perception and Investment Behaviour among Working Women: Evidence from Ernakulam District

Abstract

Investment decisions are not always guided by rational evaluation of risk and return; instead, they are often influenced by investors’ subjective perceptions and psychological responses to uncertainty. Among women investors, risk perception is widely recognised as a critical factor shaping investment behaviour. This study examines the influence of risk perception on investment behaviour among working women residing in Ernakulam district. Adopting a quantitative research design, primary data were collected from 100 working women using a structured questionnaire. Risk perception was measured through a multi-item scale capturing perceptions related to uncertainty, volatility, and potential financial loss. Structural equation modelling was employed to analyse the relationship between risk perception and investment behaviour.

The findings reveal that risk perception has a strong and statistically significant influence on investment behaviour (β = 0.843, CR = 26.697), explaining 71.1% of the variance. The results indicate that higher levels of perceived risk substantially shape behavioural tendencies, often discouraging active investment participation. The study contributes to behavioural finance literature by providing focused empirical evidence on the dominant role of risk perception in women’s investment behaviour. The findings also offer practical insights for financial institutions and policymakers to design risk-sensitive communication strategies and financial education initiatives aimed at enhancing women’s participation in financial markets.