Financial Literacy, Overconfidence, Risk Tolerance and Public Investment Decision of Ende Residents, East Nusa Tenggara Province of Indonesia

Abstract

The purpose of this study was to explore how financial literacy, risk tolerance, and overconfidence influenced public investment decisions in the Ende Region. This is a quantitative research project. With a total of 80 respondents, the study was conducted in Ende's downtown area, notably Mautapaga, Onekore, Paupire, and Potulando. As part of the initial data gathering process, the respondents were given questionnaires to complete out.
The data was assessed using SmartPLS to ensure its validity and reliability, and a hypothesis test was conducted to estimate the impact of each variable on investment decisions and how much three variables affect public investment decisions in Ende. Financial literacy has a 36.9% impact on public investment decisions, overconfidence has a 14.9 percent impact, and risk tolerance or assessment of the risk that will be accepted by investors has a 29.3% impact on public investment decisions.
According to the simultaneous test, financial literacy, overconfidence, and risk tolerance all have a 35 percent impact on people's investment decisions, with the remaining 65 percent explained by other factors.