Date of Publication


Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Management of Financial Institutions

Subject Categories

Finance and Financial Management


Ramon V. Del Rosario College of Business


Financial Management Department

Thesis Advisor

Rene B. Betita

Defense Panel Chair

Marycris O. Albao

Defense Panel Member

Edna Delantar


Behavioral finance was developed to rationally explain the reality of the irrational market and its investors. As individuals, each one has strongly ingrained biases that can negatively impact investment decisions. Hence, this study examined how behavioral biases (Overconfidence and Risk Aversion) and certain demographic factors (age, gender, and investment experience) affect the investment decisions of Filipino investors during the COVID-19 pandemic.

The study covers the COVID-19 pandemic period, conducted from April 2022 to November 2022 and acquired a sample size of 147 retail investors residing in NCR. The researchers utilized an online survey for data gathering using Single Selection and a 5-point Likert scale type of survey questionnaire. The collected data from the respondents were then tested using a statistical software program called R. This allows the creation and estimation of a structural equation model (SEM) as it can be tested using Partial Least Squares Path-Modeling (PLS-PM).

Overall, it was found that among Filipino investors, Overconfidence had a significant impact on their investment decisions, while Risk Aversion had very minimal to no significant impact at all. Filipino investors also have the tendency to be irrational because they all have risk averse and overconfident tendencies. The results also showed that not all demographic factors have an effect on the inclination towards them being more or less irrational than others. In the context of COVID-19, the pandemic affected the behavioral biases of Filipino investors. For overconfidence, the overall overconfidence of Filipino investors decreased during the pandemic which can be related to the uncertainty since everyone was affected by the adjustments during the pandemic period. For risk aversion, the pandemic urged investors to prioritize safety rather than taking risks.

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