An Empirical Study of Herding Behavior, Gender Differences, and Investment Barriers in Mutual Fund Decisions: Evidence from Teachers in Semi-Rural North-East India

Abstract

Mutual fund investment behavior among semi-rural teachers in India is shaped not only by financial awareness but also by herding tendencies, gender differences, and social influences. This study examines the behavioral and demographic factors influencing mutual fund investment decisions among teachers in semi-rural North-East India, an under-researched yet socially influential professional group. Drawing on behavioral finance theory, the study investigates herding behavior, gender-based differences, and perceived barriers affecting mutual fund participation. Using a quantitative survey design, data were collected from 125 teachers in Namsai district, Arunachal Pradesh. Reliability analysis confirmed acceptable internal consistency of the herding scale (Cronbach’s α = 0.772). Results indicate a moderate level of herding behavior, suggesting that teachers often rely on peer influence when making investment decisions. Non-parametric testing revealed a significant gender difference, with female teachers displaying stronger herding tendencies than males. Among non-investors, lack of financial knowledge and fear of financial loss emerged as key barriers, while financial literacy was significantly associated with trust-related concerns. The findings extend behavioral finance literature by demonstrating that herding tendencies persist even among educated professionals in semi-rural contexts. The study highlights the need for targeted financial literacy initiatives and trust-building mechanisms to promote informed and independent investment behavior among educators and similar professional groups.