Perceived usefulness of social media in financial decision-making: differences and similarities

Abstract

Financial decision-making through social media blogs and opinions is an area not much explored by the researchers. This study intends to understand the perceived usefulness of social media in financial decision-making amongst individuals and groups based on demographic similarities and social parameters. This paper aims to understand the perception of various subgroups in society within the large population sample. The paper applies Mann-Whitney and Kruskal-Wallis non-parametric tests to examine the proposed research questions from a dataset of 201 individuals residing in two most populated states in Northern India. The analysis reveals the differences between different groups categorized based on generation, financially dependent, educational background, occupation, and geographical location. In terms of social media’s perceived utility in financial decision-making, results suggest that segregated groups based on cohort generation and occupation have significant variations relative to others. Based on the educational context, all other segments, number of financially dependent, geographical location, were found insignificant. The novelty of the paper lies in investigating the perceived usefulness of social media in financial decision-making amongst various homogenous groups based on demographics in a developing country. The study outcomes can be useful for the financial service providers and social media platforms in comprehending consumer behavior to devise an innovative marketing strategy for financial products targeting specific segments through enhanced coordination between them. AcknowledgmentThis paper was supported by Internal Grant Agency of FaME TBU No. IGA/FaME/2019/002.

Психологічні Особливості Сприйняття Кредитних Продуктів Здобувачами Вищої Освіти

“…В епоху інформаційного прогресу і діджиталізації, переходу маркетингових технологій в електронні ресурси та соціальні мережі виникають нові проблеми, пов'язані з впливом розповсюджених блогів і соціальних мереж на прийняття молоддю фінансових рішень. Науковці аналізують можливості й користь соціальних мереж в прийнятті фінансових рішень серед різних однорідних груп на основі демографічних даних в розвинутих європейських країнах (Khan, Akhtar & Tripathi, 2020). За результатами технічного й інформаційного прогресу помітний розширений перехід валютної системи в інформаційну, що сприяє широкому розповсюдженню електронних грошей і платіжних кредитних карт, які найбільш активно застосовує молодь.…”

Information Sources for Investment Decisions: Evidence from Japanese Investors

“…In Japan, Fujiki (2020) explored the factors influencing the actual and intended sources of financial knowledge, finding that households choosing financial institutions and advisors had mainly older household heads and had more financial assets, a higher level of educational attainment, and a higher ratio of risky asset holdings for stocks and bonds. Khan et al (2020) analyzed the relationship between demographic and social parameters and the use of social media in financial decision making and found that cohort generation and occupation were significantly and favorably associated with the use of social media. Similarly, Cwynar et al (2019) examined the factors influencing the use of social media as an information source in finance in Poland and found that people with more diversified asset portfolios and those who hold the riskiest assets are more likely to use social media for information purposes.…”

“…First, sample selection and omitted variable bias are concerns. For example, Khan et al (2020) and Cwynar et al (2019) focused mainly on a specific area or small institutions, with limited use of important explanatory variables, thus questioning the representativeness and precision of the sample. Second, several studies suffer from a limited sample size bias.…”

“…For example, Khan et al (2020) and Cwynar et al (2019) used data from 201 and 415 respondents, respectively, thereby limiting the generalizability of their findings to the entire population. Third, some studies have used a single information source (e.g., Khan et al 2020;Cwynar et al 2019;Calcagno and Monticone 2015;Kramer 2016) or merged multiple information sources into one (e.g., Fujiki 2020) to investigate the factors influencing their use. These classifications do not depict a broader picture and can produce ambiguous and inconclusive results.…”

“…These classifications do not depict a broader picture and can produce ambiguous and inconclusive results. Finally, important financial variables, such as financial literacy, and time-discounting variables, such as impatience and impulsivity, are missing from the studies of Khan et al (2020), Cwynar et al (2019), andFujiki (2020). These variables can help to capture individuals' cognitive abilities and psychological reflections in the rational decision-making process (Meier and Sprenger 2013).…”