Determinants of Investment Awareness: Role of Financial Literacy, Self-control, and Saving Behavior among Individual Investors in Uttar Pradesh, India

Abstract

Investment awareness involves learning about the investment environment and financial market products, including the benefits and risks when selecting the best option for investment. This study aims to examine the direct and indirect links between Saving Behavior, Financial Literacy, Self-control and Investment Awareness. Behavioral Life Cycle Theory and Social Cognitive Theory were applied to analyse the roles of financial literacy, self-control, and saving behavior among individual investors. The study was conducted among individual investors who are engaged in investment less than 1 years in Uttar Pradesh. Snowball sampling technique was used for data collection and the sample size consisted of replies from 431 individuals from a total of 450 responders who were residents of Uttar Pradesh. The data is analyzed using partial least square-structural equation modelling (PLS-SEM).   The results show that financial literacy significantly influences investment awareness, saving behavior, and self-control, while both saving behavior and self-control also positively impact investment awareness, and self-control further enhances saving behavior. The results show that financial literacy indirectly influences investment awareness through self-control and saving behavior and directly through saving behavior with all indirect effects statistically significant and supported. This study adds to the existing knowledge about the factors that influence investment awareness, particularly among individual investors in Uttar Pradesh. The findings provide valuable insights for policymakers, educational institutions, and families, underscoring the need to increase investment awareness among individual investors and support them in making informed and effective investment decisions.