Investment Preferences Among East Indian Households: Implications For Savings Behavior And Regional Economic Development

Abstract

Investment preferences among East Indian households are shaped by cultural values, economic goals, and regional economic conditions. Traditionally, these households exhibit a strong preference for physical assets like gold and real estate. Gold, in particular, is deeply ingrained in cultural practices and is seen as a stable and liquid form of investment. Real estate is favored for its potential for long- term appreciation and security. In recent years, there has been a gradual shift towards financial instruments such as fixed deposits, mutual funds, and equities. This change is driven by increasing financial literacy, urbanization, and improved access to banking and financial services. However, risk aversion remains a significant factor, with many preferring safer investment options. The savings behavior of East Indian households has profound implications for regional economic development. High savings rates contribute to substantial domestic capital formation, which can be leveraged for infrastructure development and industrial growth. However, the preference for low-risk investments can limit the availability of venture capital for high-risk, high-reward entrepreneurial ventures. To enhance regional economic development, it is essential to encourage diversified investment portfolios. This can be achieved through financial education programs and policies that incentivize investments in equities and entrepreneurial ventures, thereby balancing security with growth potential and fostering a more dynamic economic environment. The most relevant and applicable informational data has been collected by the primary quantitative survey method considering 125 participants. In this regard, four hypotheses were established and were analyzed by including SPSS analytical software.