OSW

SIGNATURE WORK
CONFERENCE & EXHIBITION 2024

Unveiling Investor Behavior: Exploring the Interplay of Financial Literacy and Herding Behavior

Name

Ruochen Zhang

Major

Behavioral Science / Psychology

Class

2024

About

Ruochen Zhang is a senior majoring in Behavioral Science with a Psychology Track. She is interested in behavioral finance and decision-making process.

Signature Work Project Overview

My Signature Work project investigates the relationship between financial literacy and herding behavior among Chinese investors. Utilizing quantitative methods, data was collected from 382 participants via Tencent questionnaire distributed online. My study examines how variables such as age, education level, and investment experience influence financial literacy and herding behavior. Initial analysis reveals a correlation between investment experience and higher financial literacy scores. Logistic regression models further explore predictors of herding behavior, I did not find a significant association between financial literacy and herding behavior, suggesting that other factors may play a more prominent role in influencing investors’ decisions to follow the crowd. Since there is a lack of significant effects in the OLS regression analysis, further investigation is warranted. Additionally, logistic regression identifies age and education level as significant predictors of investment experience, indicating that older individuals and those with higher levels of education are more likely to engage in investment activities. The findings contribute to understanding the dynamics of herding behavior and the role of financial literacy in investment decisions among Chinese investors.

Signature Work Presentation Video