Theoretical implications

It has been suggested that marketing theoretical viewpoint could invigorate investment research (e.g. Goldstein et al. 2008; Hoffmann &

Broekhuizen 2009, Aspara & Tikkanen 2010) since there is no reason for setting investment and savings decisions apart from other consumer choices (Zhou & Pham 2004; Puustinen 2012). Consequently, to gain new insights into average household consumer’s investment decision-making, this thesis investigated investment behavior from a consumer behavioral perspective.

Previous research has shown that multiple value dimensions might be better able to explain consumer investment behavior than economic value alone (Puustinen 2012; Puustinen et al. 2013). However, prior research has only investigated perceptions of value in the post-investment phase whereas the focus of this thesis was in the pre-investment stage. As perceived value is considered to be dynamic in nature and change over the stages of the purchase process (Gardial et al. 1994; Parasunaman 1997; Woodruff 1997), this thesis added knowledge on the pre-investment perceptions of value, that is, expected investment value. Moreover, where previous research measured perceived investment value among the members of the Federation of Stock Investors (Puustinen et al. 2013), this

thesis measured perceptions of investment value among average household consumers. Based on the results, expected investment value among ordinary consumers is also multidimensional, however, only consisting of three dimensions, namely economic, functional and emotional. Thus, symbolic benefits were not something ordinary consumers expected to gain from investing in stocks or funds.

The way investment value was measured in the research of Puustinen (2012) and Puustinen et al. (2013) mainly focused on the benefits of investing (means-end value-model). As the purpose of this thesis was not only to explain why consumers do invest in stocks or investment funds, but also why they do not, more emphasis was given on studying the consumers’ perceptions of investment related sacrifice. Expected sacrifice was found to be a multidimensional higher order construct, consisting of four dimensions, namely effort, financial risk, source risk, and psychological risk. To the best of my knowledge, no prior research has measured consumer’s expectations of investment related sacrifice. Thus, this is a contribution to the current investment literature and should be more empirically tested and verified. Moreover, the measurement items need more reviewing as the scale was constructed purely for the purposes of this study.

Surprisingly, the direct relationship between expected investment value and investment intention was found to be insignificant in both research models. This was somewhat surprising as most consumer behavior theories suggest that consumer’s evaluation of the behavior would impact behavioral intentions directly (e.g. Consumer Theory, Theory of Reasoned Action, Theory of Planned Behavior). However, it has been argued that when the behavior requires changes in lifestyle and actions, high values might not determine behavior directly due to “value-action gap” (e.g.

Pickett-Baker & Ozaki 2008). The value-action gap has been mostly researched in the field of environmental behavior, where it has been found

that consumers generally evaluate environmentally friendly products highly, however still might not intend to purchase them as using them would require a chance in one’s behavior, and thus would not assimilate perfectly with one’s life. However, expected investment value affected investment intentions indirectly via compatibility, making it a significant determinant of consumer investment intentions. Accordingly, the results suggest that even though a consumer would expect to receive value from investing, he or she will not invest if the investment alternative is not perceived to be compatible with his or her current life. Thus, investing needs to match with the consumer’s past experiences, existing values and practices, to increase investment intentions. Thus, consumers are prone to choosing investment options that are easily assimilated with their life.

Furthermore, the research made a contribution regarding the effect of investment knowledge on investment intentions. Whereas the relationship between financial knowledge and financial behavior has been acknowledged in prior research (e.g. Lusardi & Mitchell 2005; 2007), it has remained somewhat unclear whether knowledge affects intentions directly or indirectly. Thus, it has been suggested (e.g. Pellinen et al. 2011) that future studies should concentrate on examining the consequences of financial knowledge. The results of this research suggested that subjective investment knowledge has a positive effect on expected investment value (stocks-model) and a negative effect on expected sacrifice (funds-model).

Consequently, the results support the findings within the field of consumer behavior, which have indicated that consumers with differing levels of product knowledge use different evaluative strategies and therefore assess products differently. Hence, the effect of subjective investment knowledge on investment intentions is indirect in nature.

Whereas behavioral finance has been criticized for its inability to deliver theoretical models, this thesis’ aim was to build a structural model based on solid theoretical and practical justifications to explain consumers’

intentions to invest in stocks and investment funds. More specifically, the

objective of the model was to test the relationships between expected investment value, expected sacrifice, perceived compatibility, behavioral control, subjective investment knowledge, and investment intentions. The validity of the model in explaining investment intentions was tested for two investment alternatives, that is, for stocks and investment funds. Whereas the funds-model displayed a better fit, the fit of both models were within an acceptable range. Thus, the theoretical model as a whole can be considered as a contribution to the prior literature, as it describes well the complex relationships between expected investment value, expected sacrifice, perceived compatibility, behavioral control, subjective investment knowledge, and investment intentions.

Moreover, the results revealed that consumers with and without prior investment experience evaluate all of the investigated aspects of investing differently, except for financial risk. Thus the results support the notion that past experiences affect the attractiveness of consumer alternatives (Murray & Häubl 2007), by revealing that consumers without investment experience evaluate investment related sacrifices higher and value, compatibility and intentions lower. Accordingly, our suggestion that cognitive lock-in affects consumer investment decisions is supported. The finding also strengthens the idea that investment decisions are not made based on the consideration of risk and returns alone, but instead might be affected by skill-based habits and automated behaviors, which then again could explain why consumers become locked-in to inferior investment or savings alternatives, such as deposit accounts.