A Study on Herd Behavior in Family Investment Decisions at Siddapura (Udupi)

This study examines the presence, determinants, and effects of herd behavior in family investment decisions in Siddapura (Udupi). Herd behavior, a phenomenon where individuals imitate the investment actions of others rather than relying independent analysis, could produce irrational financial choices and increased risk exposure. Using a descriptive and analytical research design, primary data were gathered from 50 households through a structured questionnaire facilitated the collection of primary data, whereas secondary data were sourced from existing literature. financial reports. Descriptive statistics summarized demographic and investment profiles, and inferential statistics, including Chi-square tests and ANOVA were used to test three hypotheses. The results reveal that age and income do not have a statistically significant influence on herd behavior, whereas financial literacy indicates a notable negative association with these tendencies, indicating that lower financial literacy increases the likelihood of following others’ investment choices. Stocks and mutual funds emerged as the most preferred investment avenues,suggesting a shift toward market-oriented instruments. The outcomes point to the importance of targeted financial literacy programs to promote independent, informed investment decision-making among families. This research contributes to behavioral finance literature by highlighting the role of financial awareness in mitigating herd behavior at the household level.