Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport
ISSN (Print): 2376-1326 ISSN (Online): 2376-1334 Website: Editor-in-chief: Pr. Abdelfatteh Bouri
Open Access
Journal Browser
Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2020, 8(1), 1-6
DOI: 10.12691/jbe-8-1-1
Open AccessArticle

Availability Bias of Urban and Rural Investors: Relationship Study of the Gujarat State of India

Abhishek Sachan1 and Pawan Kumar Chugan2,

1Quantitative Analyst, Quantile Analytics Co., Indore, Madhya Pradhesh, India

2Professor (Retd.), Institute of Management, Nirma University (IMNU), Visiting Professor IMNU and AIIM, Ahmedabad & PDPU, Gandhinagar, Gujarat and Fellow ISTD, India

Pub. Date: July 28, 2020

Cite this paper:
Abhishek Sachan and Pawan Kumar Chugan. Availability Bias of Urban and Rural Investors: Relationship Study of the Gujarat State of India. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2020; 8(1):1-6. doi: 10.12691/jbe-8-1-1


Biases challenge ability of investors to make rational decisions. The knowledge of concentration of biases based on demographics of investors may have implications for wealth managers and policy makers. This study focuses on relationship between availability bias and urban-rural residence of individual investors. The study reports that place of residence significantly relates to availability bias. A person belonging to rural areas has higher probability to be susceptible to availability bias. Indian rural population has lower per capita incomes and has lower cushion to absorb financial losses, in such a scenario, cost of being biased is very high, for which this study implicates the requirement of credible and sufficient information sources to reduce the availability bias of investors. Wealth managers, hence, are required to develop different communication skills for rural clients in order to build consensus for optimum investment decisions.

availability bias behavioural finance behavioural economics cognitive bias investor demographics investor education investor information individual investors

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit


[1]  Tversky, A., & Kahneman, D. (1973). Availability: A heuristic for judging frequency and probability. Cognitive psychology, 5(2), 207-232.
[2]  Ariely, D. (2009). The end of rational economics. Harvard Business Review, 87(7-8), 78-84.
[3]  Kahneman, D. (2010). The riddle of experience vs. memory. TED2010, filmed Feb.
[4]  Schwartz, B. (2004). The paradox of choice: Why more is less. New York: Ecco.
[5]  Camerer, C. (2003). Behavioral game theory: Experiments in strategic interaction: Princeton University Press.
[6]  Hershfield, H. E., Goldstein, D. G., Sharpe, W. F., Fox, J., Yeykelis, L., Carstensen, L. L., & Bailenson, J. N. (2011). Increasing saving behavior through age-progressed renderings of the future self. Journal of Marketing Research, 48(SPL), S23-S37.
[7]  Chen, M. K. (2013). The effect of language on economic behavior: Evidence from savings rates, health behaviors, and retirement assets. The American economic review, 103(2), 690-731.
[8]  Sutherland, R. (Producer). (2010). Sweat the Small Stuff | Video on Retrieved from
[9]  Ayres, I., Raseman, S., & Shih, A. (2012). Evidence from two large field experiments that peer comparison feedback can reduce residential energy usage. Journal of Law, Economics, and Organization, ews020.
[10]  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.
[11]  Lewellen, W. G., Lease, R. C., & Schlarbaum, G. G. (1977). Patterns of investment strategy and behavior among individual investors. The Journal of Business, 50(3), 296-333.
[12]  Warren William, E., & Stevens Robert, E. (1990). Using demographic and lifestyle analysis to segment individual investors. Financial Analysts Journal, 46(2).
[13]  Gupta, L. C., Jain, N., & Kulshreshtha, Y. (1994). Shareowners' geographic distribution: city-wise, urban-rural, and state-wise: Society for Capital Market Research and Development.
[14]  Koreto, R. J. (2001). Survey: Values Affect Investing. Financial Planning, 31(10), 31.
[15]  Rajarajan, V. (2002). Determinants of Portfolio choice of individual investors. The Indian Economic Journal, 50(1), 81.
[16]  Rajarajan, V. (2003). Investors' demographics and risk bearing capacity. Finance India, 17(2), 565.
[17]  Kiran, D., & Rao, U. (2005). Identifying investor group segments based on demographic and psychographic characteristics. Paper presented at the 8th Capital Markets Conference, Indian Institute of Capital Markets Paper.
[18]  Ng, L., & Wu, F. (2006). Revealed stock preferences of individual investors: Evidence from Chinese equity markets. Pacific-Basin Finance Journal, 14(2), 175-192.
[19]  Hira, T. K., & Loibl, C. (2008). Gender differences in investment behavior: Springer.
[20]  Feng, L., & Seasholes, M. S. (2008). Individual investors and gender similarities in an emerging stock market. Pacific-Basin Finance Journal, 16(1), 44-60.
[21]  Mittal, M., & Vyas, R. (2009). Does Irrationality in Investment Decisions Vary with Income? IUP Journal of Behavioral Finance, 6(1), 26.
[22]  Mittal, M. (2010). Study of differences in behavioral biases in investment decision-making between the salaried and business class investors. IUP Journal of Behavioral Finance, 7(4), 20.
[23]  Hood, M., Nofsinger, J. R., & Varma, A. (2014). Conservation, discrimination, and salvation: Investors’ social concerns in the stock market. Journal of Financial Services Research, 45(1), 5-37.
[24]  Sahi, S. K., Arora, A. P., & Dhameja, N. (2013). An exploratory inquiry into the psychological biases in financial investment behavior. Journal of behavioral finance, 14(2), 94-103.
[25]  Sireesha, P. B., & Laxmi, C. (2013). Impact of Demographics on Select Investment Avenues: A Case Study of Twin Cities of Hyderabad and Secunderabad, India. International Journal of Marketing, Financial Services & Management Research, 2(6).
[26]  Sachan, A. (2015). A study of relationship between demographics and emotional biases of individual investors. International Journal of Management & Behavioural Sciences (IJMBS), 6, 458.
[27]  Chandra, A., & Kumar, R. (2012). Factors influencing Indian individual investor behaviour: survey evidence.
[28]  Pompian, M. M. (2006). Behavioral finance and wealth management. How to build optimal portfolios for private clients, 28.
[29]  Lee, N. & Peters, M. (2015). Business Statistics Using EXCEL and SPSS, SAGE.
[30]  Gaurav, S., & Singh, A. (2012). An Inquiry into the Financial Literacy and Cognitive Ability of Farmers: Evidence from Rural India. Oxford Development Studies, 40(3), 358-380.
[31]  Dholakia, R. H., Pandya, M. B., & Pateriya, P. M. (2014). Urban-Rural Income Differential in Major States: Contribution of Structural Factors.
[32]  Stapel, D. A., Reicher, S. D., & Spears, R. (1995). Contextual determinants of strategic choice: Some moderators of the availability bias. European Journal of Social Psychology, 25(2), 141-158.