Modeling Choice of Common Investors Of India in Gold as An Investment Option

Abstract

Gold is a prime investment instrument in India. Indian investor has optimal confidence in choosing gold as an investment option. India is a vast demography, and gold is a household object. The investors in gold are not very rare to find because India tops the global demand charts in gold. The common investors significantly are the demographic strength behind the prosperous Indian markets of gold and jewelry. There are many exogenous factors and demographic factors affecting investment. This research work tries to explore why common investors invest in gold. There are many variants of investment in gold like jewelry, coins and bars, gold ETF, shares and stocks of companies dealing in gold, government bonds and certificates, MCX, etc. this research work addresses that in what do the investors invest, drawing a comparison in gold and its variants. The novice gap identified in this research work is the kind of choice and behavior a common investor practice while investing in gold. The research gap is followed by conceptual framework and development of hypotheses. A self-structured questionnaire was used to collect data from 384 common investors. The choice is classified as rational, rule-based and behavioral and common investor follows which league is shown by the medium of PIDM (person item distribution map), carried out in Rasch analysis. The Rasch analysis indicates the hierarchy of choice model used by the common investor while investing in gold. The findings indicated that there are eight factors influencing the choice of common investors in gold as an investment option, physical gold metal and jewelry are the most preferred investment options and the choice of investment is behavioral choice type. Demographic factors influenced investment behavior and there exists significant difference between demographic traits of investors. The findings and suggestions of this research work are crucial motivation and potential for industrialists and industry as whole; for investment product developers; for policy makers; for jewelers; for researchers; for customers and common investors. The research holds potential motivation for insurance sector policy makers and gold loan giving companies. newline