Investigating the Relationship between Religious Attitude and Perceptual Errors in Stock Exchange Investors

Document Type : Original Article

Authors

1 Accounting Professor of Shiraz University, Iran

2 Accounting Ph.D student, Shiraz University

3 Accounting Ph.D student and Member of Young Researchers and Elite Club, Bandar Abb as Branch, Islamic Azad University, Bandar Abbas, Iran. (Corresponding author)

Abstract

The perceptual error of the investors is one of the issues discussed in behavioral finance. The perceptual error is a wrong sensual or perceptual error.  That is, what we see or hear does not match with the reality. Regarding the fact that the perception of individuals is affected by their worldview and beliefs and religious attitudes can also affect their viewpoint, in this study, the relationship between these two variables was investigated. The study used an applied-survey method. The instrument of the study was a questionnaire and the subjects of the study were 200 individuals who were randomly chosen from individual investors, the experts of investment institutes, stock brokers on stock exchange and stock exchange organization across the country (Iran) in 2016. The data were analyzed using SPSS software. After investigating the normality of the data, Pearson correlation formula was used to investigate the relationship between the variables in the form of 1 main hypothesis and 5 sub-hypotheses. The results indicated that there was no significant relationship between religious attitude and Perceptual error but there was a negative and significant relationship between religious attitude and overconfidence. There was also no significant relationship between religious attitude and hindsight, escalation of commitment, availability and randomness. Investigation of transposition of perceptual errors, using Friedman test, indicated that most of the errors were related to availability error and least of them were related to overconfidence error.

Keywords


1)     Aqaei, MA., Mokhtarian O. (2004). Investigating the effective factors on investors’ decision making in Tehran Stock Exchange, Iran. Accounting and auditory investigations,
2)     Bellouma, M., Belaid, F. (2016). Decision-Making of Working Capital Managers: A Behavioral Approach. Journal of Business Studies Quarterly, 7 (4), 30- 43.
3)     Chen, C X,. Gores, T., Nasev, J. (2013). Managerial  overconfidence  and  cost  stickiness.  Working paper, University of Illinois at Urbana Champaign and University of Cologne.
4)     Dehghan, A. (2008). Psychological factors affecting individuals’ investment intention in Tehran Stock Exchange. Tadbir monthly, 196, 50-59.
5)     Eslami bidgoli, S. (2008). From behavioral finance to neurofinance. Payam-e Sarmaye gozari publication, 30, 34-37.
6)     Fallahshams, M,. Haqshenas kashani, F., Afshar hajar, F. (2012). Investigating the effect of locus of control on perceptual errors in decision making among investors in Tehran Stock Exchange. Investment knowledge publication, 1(3),105-123.
7)     Feiz kashani, M. (2007). Almohjatolbayza. Islamic Publisher, Qom, Iran. 6, 233
8)     Fernandes, J., Pena JI., Tabak, B. (2009). Behavior Finance and Estimation Risk in Stochastic Portfolio Optimization. Banco Central Do Brasil. 184.
9)     Fernandes, JLB., Fernandes, TC., Matsumoto, AS., Chagas, PC. (2015). Behavioral Finance: The Aversion to Uncertainty Bias in Individual Financial Decisions.
10)  Hirshleifer, D. (2001). Investor psychology and asset pricing. The Journal of Finance, 56,1533-1597.
11)  Irvani, M., Khodapanahi, MK. (2001). Perceptual and emotional psychology. SAMT ppublication. Tehran, Iran.
12)  Jalili S., Pirayesh, R., Qasemzade, L. (2014). The effects of emotional intelligence on individual investors’ decision making in Tehran Stock Exchange. Accounting studies publication, 14, 81-103.
13)  Kahneman, D., Tversky, A. (1982). On the psychology of prediction. Psychological review, 80, 237-251.
14)  Kermani mamazandi, Z., Danesh, E. (2011). The effects of religious attitude and sensation seeking on marital adjustment in married teachers of Pakdasht city, Iran. Journal of Psychological studies, 7(2), 129-154.
15)  Khaki, Q. (2008). Research method with dissertation writing approach. Baztab publication, Tehran, Iran.
16)  Khandan, A. (2007). Values and procedures, planning model at the Islamic University, with an emphasis on martyr Motahhari, the value of knowledge: Introduction to the Islamic University, Tehran: University of Imam Sadeq. 121- 176.
17)  Khashan, H., Kreidie, L. (2001). The Social and Economic Correlates of Islamic Religiosity, World Affairs. 164 (2).
18)  Khodayarifard, M., Qobari banab, B., Shokouhi yekta, M., Nesfat, M. (1997). preparing a an instrument to measure the religious attitudes and beliefs of university students. Paper collection of the first assembly on the effects of religion on psychological health. 4,126-138.
19)  Kr¨uger, P., Landier, A., Thesmar, D. (2012). Categorization Bias in the Stock Market. Catolica Lisbon, school of business and economics.
20)  Lashkari, M., Mortazi, H. (2011). Behavioral finance theory and its effects on investment size among investors of Tehran Stock Exchange. Rahbari Publication. 26.
21)  Mahzoun, O. (2009). Investigating the relationship between individual, occupational and personal characteristics  and common behavioral biases among investors and activists in capital market. MA dissertation. Department of economic sciences.
22)  Montier,  J. (2007). Behavioral investing a practitioners guide to applying behavioral finance. John Wiley & Sons.
23)  Motahari, M. (1991). Bist Goftar (20 sayings). Sadra publication.
24)  Muhamad, R., Devi, S. (2006). Religiousity and Malay Muslim Investors in Malaysia: An Analysis on Some Aspects of Ethical Investment Design, The International Conference on Business and Information. 12-14.
25)  Nilchi, M., Salehifar, M., Mozafari, M., vanani H. (2015). Behavioral finance in12 years. A review  of concepts, researches and university backgrounds. Capital market monthly, 122 (123), 64-69.
26)  Nofsinger, J. (2001). Investment madness: How psychology affects your investing and what to do about it. Pearson Education; 1st Edition.
27)  Pompian, M. (2006). Behavioral Finance and capital Management. John Wiley Sons Inc. Publication.
28)  Pompian, M. (2009). Behavioral finance knowledge and asset management. Translated by Badri. first edition. Keyhan Publication. Tehran, Iran
29)  Qolipour, F. (2009). Explaining the relationship between personality types and perceptual errors among investors in Tehran Stock Exchange. MA dissertation. Tehran University, Iran.
30)  Qolipour, R. (2007). Organizational behavior management, individual behavior. SAMT publication. Tehran, Iran.
31)  Raei, S., Fallahpour, S. (2004). Behavioral finance. A different approach in financial arena, Tehran University Financial Researches Quarterly. 18, 77-106.
32)  Razini, R., Azizi, M. (2015). Pattern design decisions Islamic Approach. Islamic Management, 23 (4), 73- 100.
33)  Ritter, J. (2003). Behavioral finance pacific. Basin finance journal, 11 (4), 429-437.
34)  Rogers, J. (2006). The framing of decisions and the psychology of choice. Science, 211 (4481), 453–458.
35)  Saadi, R., Qolipour, A., Qolipour, F. (2010). Investigating the effects of investigators’ personality and perceptual errors on their investigation in Tehran Stock Exchange. Financial researches publication, 29 (12), 41-58.
36)  Saeidi, A., Mashayekhi, M. (2011). Investigating the effects of moon cycles on market returns in Tehran Stock Exchange. Stock Exchange Quarterly, 14, 81-98.
37)  Sarmad, Z., Bazargan, A., Hejazi, E. (2007). Research methods in behavioral sciences. Agah publication. Tehran, Iran.
38)  Seif, A. (2003). Instructional evaluation and assessment methods. Dowran publication. Tehran, Iran.
39)  Sewell, M. (2010). Behavioral Finance. University of Cambridge.
40)  Shiller,  R. (2000). Irrational Exuberance. Princeton University Press. Princeton. New Jersey, USA, 470-489.
41)  Simon,  H. (1955). A Behavioral Model of Rational Choice, Cowles Foundation Paper 98. The Quarterly Journal of Economics, LXIX, 99-118.
42)  Villatoro, F. (2009). The delegated portfolio management problem: Reputation and herding. Elsevier B.V. Journal of Banking & Finance. 33 (11), 2062- 2069.
43)  Wilde, A., Joseph, S. (1997). Religiosity and Personality in a Muslim Context. Personality and Individual Differences. 23(5), 899-900.
44)  Winfield,  LF. (1995). The knowledge based on resilience in African-American adolescents, In L. J. Crockett, & A. C. Crouter (Eds.), Pathways through adolescence, Individual development in relation to social contexts. Mahway, NJ, Lawrence Erlbaum.
45)  Winnie, N., Lishenga, J., Oloko, M. (2017). The Relationship between Investor Behavior and Portfolio Performance at the Nairobi Securities Exchange. International Journal of Multidisciplinary Research and Development, 2 (5), 548-551.
46)  Yang, K., Mao, X. (2007). A study of nurses’ spiritual intelligence: A cross-sectional questionnaire survey. International Journal of Nursing Studies, 44, 999–1010.
47)  Zohour, A., Tavakolli, A. (2001). The religious attitudes of students in Kerman  University of Medical Sciences. Armaqan-e Danesh publication, 28, 41-52.