BEHAVIOURAL BIASES AND INVESTMENT DECISIONS ACROSS DEMOGRAPHIC GROUPS IN NIGERIA

This study examines how behavioural biases, specifically overconfidence, herding, loss aversion, anchoring, and the availability heuristic, influence investment decision quality across demographic groups in Nigeria, including variations by age, income, and educational attainment. Drawing on a cross-sectional dataset of 7,740 Nigerian investors collected through a structured survey, we estimate an ordinary least squares (OLS) regression model with robust standard errors, incorporating a comprehensive array of control variables spanning financial knowledge, investment experience, risk tolerance, trust in financial institutions, macroeconomic conditions, and psychographic characteristics. Our findings reveal that all five behavioural biases exert statistically significant and economically meaningful negative effects on investment decision quality, with loss aversion (β = −3.76, p < 0.001) and overconfidence (β = −3.41, p < 0.001) exerting the strongest dampening effects. Educational attainment and financial literacy significantly moderate the overconfidence–decision quality relationship, while income level moderates the loss aversion effect. Urban residence, access to financial advice, cognitive ability, and patience further attenuate bias-driven suboptimal decisions. Post-estimation diagnostics confirm model robustness. The study contributes original empirical evidence on the demographic heterogeneity of behavioural biases in an under-studied emerging market context, offering actionable implications for policymakers, financial institutions, and investor education programmes in Nigeria and comparable developing economies.