Rasch Analysis On Investment Decision Anomalies in Indonesian Islamic capital market

Darmawan Darmawan



Purpose – This Research aims to understand what behavioural anomalies are in making investment decisions in the Indonesian Islamic capital market and what factors are behavioural anomalies in making investment decisions in the Indonesian Islamic capital market.

Methodology - This Research uses a quantitative approach by applying Rasch analysis to measure five types of investment behaviour anomalies. Data was collected using a questionnaire.

Findings - The endowment and its items are considered the primary considerations for investors. On the other hand, Anchoring and Adjustment of all the items are not considered the primary consideration. Meanwhile, Conservatism, Optimism and Hindsight spread to both categories of items. The difference in responses by gender was found that only on the item, Feeling greater comfort and optimism with their employer's stock, felt that investing there was less risky than investing elsewhere. Meanwhile, the difference in responses based on age was found that the age of thirties most often gave a different response from other respondents, especially in the indications of Endowment and Hindsight. In comparison, the difference in responses at the age of forties occurred in the items indicating optimism. Financial service providers are advised to offer the most suitable financial products based on gender differences. The most important thing is that in their thirties, an age group that tends to maintain their investment for a longer time and that investment decisions and risks in share ownership where they work are responded differently by gender.

Keywords: Behavior Finance, Investment Decision, Rasch Analysis.


Behavior Finance; Investment Decision; Rasch Analysis

Full Text:



Al Mamun, M., Syeed, M., & Yasmeen, F. (2015). Are investors rational, irrational or normal? Journal of Economic & Financial Studies, 3(4), 1-15. https://doi.org/10.18533/jefs.v3i04.161

Becker, G. S. (1962). Investment in human capital: A theoretical analysis. Journal of Political Economy, 70(5), 9–49.

Bruno, S., Ahmed, S., Shapiro, A., & Street, A. (2016). Risk neutral and risk averse approaches to multistage renewable investment planning under uncertainty. European Journal of Operational Research, 250(3), 979-989. https://doi.org/10.1016/j.ejor.2015.10.013

Cohn, R. A., Lewellen, W. G., Lease, R. C., & Schlarbaum, G. G. (1975). Individual investor risk aversion and investment portfolio composition. The Journal of Finance, 30(2), 605–620.

Frankfurtera, G. M., & Mcgoun, E. G. (2001). Anomalies in finance: What are they and what are they good for? International Review of Financial Analysis, 10(4), 407-429. https://doi.org/10.1016/S1057-5219(01)00061-8

Gunay, S., & Demirel, E. (2011). Interaction between demographic and financial behavior factors in terms of investment decision making. International Research Journal of Finance and Economics, 66, 147–156.

Huberman, G., & Jiang, W. (2006). Offering versus choice in 401(k) plans: Equity exposure and number of funds. The Journal of Finance, 61(2), 763–801.

Jegadeesh, N. (1990). Evidence of Predictable Behavior of Security Returns. The Journal of Finance, 45(3), 881–898. https://doi.org/10.1111/j.1540-6261.1990.tb05110.x

Kabra, G., Mishra, P., & Dash, M. (2010). Factors influencing investment decisions of generations in India: An econometric study. Asian Journal of Management Research, 4, 305–326.

Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives, 5 (1), 193-206.

Kansal, P. (2015). Anchoring effect in investment decision making- A systematic literature review. Asia Pacific Journal of Research, 1, 17-27.

Kartini, K., & Nahda, K. (2021). Behavioral biases on investment decision: A case study in Indonesia. The Journal of Asian Finance, Economics and Business, 8(3), 1231–1240. https://doi.org/10.13106/jafeb.2021.vol8.no3.1231

Lintner, J. (1965). The Valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets. The Review of Economics and Statistics 47(1), 13–37.

Maneemaroj, P., Lonkani, R., & C., C. (2021). Appropriate expected return and the relationship with risk. Global Business Review. 22(4), 865-878. https://doi.org/10.1177/0972150919830879

Mittal, S. (2022). Behavior biases and investment decision: Theoretical and research framework. Qualitative Research in Financial Markets, 14(2), 213-228. https://doi.org/10.1108/QRFM-09-2017-0085

Mroua, M., & Abid, F. (2014). Portfolio revision and optimal diversification strategy choices. International Journal of Managerial Finance. 10(4), 537-564. https://doi.org/10.1108/IJMF-07-2012-0085

Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221. https://doi.org/10.1016/0304-405X(84)90023-0

Park, K., & Shapira, Z. (2017). Risk and Uncertainty. In M. Augier & D.J. Teece (eds.), The Palgrave encyclopedia of strategic management. Palgrave Macmillan.

Polkovnichenko, V., Wei, K., & Zhao, F. (2019). Cautious risk takers: Investor preferences and demand for active management. The Journal of Finance, 74, 1025-1075. https://doi.org/10.2139/ssrn.2022416

Ryandono, M. N., Muafi, M., & Guritno, A. (2021). Sharia Stock Reaction Against COVID-19 Pandemic: Evidence from Indonesian Capital Markets. The Journal of Asian Finance, Economics and Business, 8(2), 697–710. https://doi.org/10.13106/jafeb.2021.vol8.no2.0697

Simon, H. A. (1997). Administrative behavior: A study of decision-making processes in administrative organizations. Macmillan Co.

Speelman, C., Clark-Murphy, M., & Gerrans, P. (2013). Decision making clusters in retirement savings: Gender differences dominate. Journal of Family and Economic Issues, 34(3), 329–339. https://doi.org/10.1007/s10834-012-9334-z

Sumintono, B., & Widhiarso, W. (2015). Aplikasi Model Rasch untuk penelitian ilmu-ilmu sosial (edisi revisi) (Application of Rasch Modelling in social science research, Revised Edition). Trimkom Publishing House.

Thaler, R. (1980). Toward a positive theory of customer choise: A Reference dependent model. Journal of Economics Behavior and Organization, 1, 39-60. https://doi.org/10.1016/0167-2681(80)90051-7

Van Dinh, D. (2021). Analyzed relationship between risks and expected returns. Journal of Economic and Administrative Sciences, 37(1), 1-25. https://doi.org/10.1108/JEAS-05-2021-0088

Zaiane, S. (2015). Behavioral biases of individual investors: The effect of anchoring. Eurasian Journal of Social Sciences 3(1), 13-19. https://doi.org/10.15604/ejss.2015.03.01.002

Zhang, Y., & Zheng, X. (2015). A study of the investment behavior based on behavioral finance. European Journal of Management and Business Economics, 10(1), 1–5. https://doi.org/10.12955/ejbe.v10i1.557

DOI: https://doi.org/10.17509/rief.v5i2.56994


  • There are currently no refbacks.

Copyright (c) 2023 Dr. Darmawan Darmawan, SPd.,MAB

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

This journal provides immediate open access to its content on the principle that makes research freely available to the public and supports a greater global exchange of knowledge.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 Internasional (CC BY-SA 4.0).

StatCounter - Free Web Tracker and Counter View My Stats