Economic Annals-XXI: Volume 211, Issue (11-12), Pages: 51-55
Citation information
Djuachiriaty, Yu., Jamaliah, Putra, W., Rosyadi, & Bustami (2024). Economic and psychological determination in civil servants’ investment decisions ahead of retirement: empirical evidence from Indonesia. Economic Annals-XXI, 212(11-12), 51-55. doi: https://doi.org/10.21003/ea.V212-09
Yuni Djuachiriaty
PhD (Economics),
Researcher and Lecturer,
Human Resources Development Agency
of West Kalimantan Province
Jl. Moh. Sohor, Pontianak, 78121, Indonesia
yuni.djuachiriaty09@gmail.com
ORCID ID: https://orcid.org/0009-0001-5559-071X
Jamaliah
PhD (Economics),
Researcher and Lecturer,
Faculty of Economics and Business,
Tanjungpura University
A Yani, Pontianak, 78124, Indonesia
Jamaliah@ekonomi.untan.ac.id
ORCID ID: https://orcid.org/0000-0001-5110-5986
Windhu Putra
PhD (Economics),
Researcher and Lecturer,
Faculty of Economics and Business,
Tanjungpura University
A Yani, Pontianak, 78124, Indonesia
windhu.putra@ekonomi.untan.ac.id
ORCID ID: https://orcid.org/0009-0006-6697-7393
Rosyadi
PhD (Economics),
Researcher and Lecturer,
Faculty of Economics and Business,
Tanjungpura University
A Yani, Pontianak, 78124, Indonesia
rosyadi@ekonomi.untan@ac.id
ORCID ID: https://orcid.org/0000-0002-8962-931X
Bustami
PhD (Economics),
Researcher and Lecturer,
Faculty of Economics and Business,
Tanjungpura University
A Yani, Pontianak, 78124, Indonesia
bustami_ptk@yahoo.com
ORCID ID: https://orcid.org/0009-0004-0869-1931
Economic and psychological determination in civil servants’ investment decisions ahead of retirement: empirical evidence from Indonesia
Abstract. This study aims to examine the influence of economic and psychological factors on the investment decisions of Civil Servants (PNS) who are approaching retirement in West Kalimantan Province of Indonesia. The financial factors studied included investment feasibility, while the psychological factors examined were overconfidence, herding, regret aversion, and risk tolerance. Data was obtained from a survey of 176 civil servants who will retire in 2025-2029, and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The study’s results indicate that investment feasibility, overconfidence, herding, regret aversion, and risk tolerance have a positive and significant impact on investment decisions. The path coefficient and R² values indicate that the explanatory model is quite robust (e.g., R² > 0.50 for investment decisions). These findings reinforce the behavioral finance literature, which suggests that, in addition to economic considerations, psychological biases also play a significant role in investment decisions, particularly in the lead-up to retirement. Practical implications include the need to develop financial literacy and policy interventions that consider psychological aspects, enabling civil servants to make more informed and optimal investment decisions.
Keywords: Behavioral Finance; Investment Feasibility; Overconfidence; Herding; Regret Aversion; Risk Tolerance; Investment Decision; Civil Servants
JEL Classifications: Е24; Е41; Е64; I18; J28; J31
Acknowledgements and Funding: The authors received no direct funding for this research.
Contribution: The authors contributed equally to this work.
Data Availability Statement: The dataset is available from the authors upon request.
DOI: https://doi.org/10.21003/ea.V212-09
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Received 25.09.2024
Received in revised form 9.10.2024
Accepted 22.10.2024
Available online 28.12.2024