Dual-process theory and Investment Behaviours of South African Students


  • Bomi Nomlala University of KwaZulu-Natal
  • Moyosore Ogun University of KwaZulu-Natal
  • Tshegang Chipeya eThekwini Municipality KwaZulu-Natal
  • Arshad Abdul Latiff


Dual-process theory; Investment behaviour; Financial literacy; South Africa; Logistic regression model


Hitherto, the investment behaviours of university students in South Africa remains largely unknown. Understanding behavioural tendencies of students studying towards business degrees can reveal interesting facts about the mediating role of financial education on financial behaviours. The study is based on a survey of 344 business students at a South African university whose investment behaviours and the relationship between their investment behaviours and their socio-demographic factors were voluntarily assessed. As a novel study, there is currently no scientific evidence on the investment behaviours of South African, especially such considering the investment behaviour of South African students using the Dual-process theory approach. This study utilised ANOVA and a logistic regression model to analyse and explore relationships between the students’ mean percentage scores and their investment behaviours vis-à-vis their socio-demographic factors. The findings suggest that business students have negative investment behaviours as they are likely to rely on their intuition rather than the cognitive thinking process. Furthermore, it was found that students in Finance-related professions are more likely to rely on their intuition when making financial decisions in comparison to their Non-Finance related counterparts. Lastly, although it was found that there is no statistical significance between students’ demographic factors towards intuitive investment behaviour and the overall investment behaviour of students. The findings of the study suggest that male students and students who major in Law degrees are less likely to make uncontrollable, unintentional, unconscious and efficient (fast) finance-related decisions.


Aboluwodi D and Nomlala B. (2020) Investment Literacy of University Students in South Africa. Acta Universitatis Danubius. Œconomica 16.

Abreu M. (2014) Individual Investors' behavioral biases: excerto da Lição de Síntese das Provas de Agregação.

Akben-Selcuk E. (2015) Factors influencing college students’ financial behaviors in Turkey: Evidence from a national survey. International Journal of Economics and Finance 7: 87.

Altman M. (2012) Implications of behavioural economics for financial literacy and public policy. The Journal of Socio-Economics 41: 677-690.

Angulo‐Ruiz F and Pergelova A. (2015) An empowerment model of youth financial behavior. Journal of Consumer Affairs 49: 550-575.

Ansong A and Gyensare MA. (2012) Determinants of university working-students’ financial literacy at the University of Cape Coast, Ghana. International Journal of Business and Management 7: 126.

Baker HK and Ricciardi V. (2015) Understanding behavioral aspects of financial planning and investing.

Botha M. (2013) A Comparative Analysis of the Financial Literacy of Final Year Diploma Students in Different Fields of Study at the University of Johannesburg: University of Johannesburg.

Brugiavini A, Cavapozzi D, Padula M, et al. (2015) Financial education, literacy and investment attitudes.

Chmelíková B. (2016) Financial Decision-Making among Finance Students: An Empirical Study from the Czech Republic. Self 498: 084.

Christelis D, Jappelli T and Padula M. (2010) Cognitive abilities and portfolio choice. European Economic Review 54: 18-38.

Cole S, Paulson A and Shastry GK. (2014) Smart money? The effect of education on financial outcomes. The Review of Financial Studies 27: 2022-2051.

Coleman L. (2014) Why finance theory fails to survive contact with the real world: a fund manager perspective. Critical Perspectives on Accounting 25: 226-236.

Croskerry P, Singhal G and Mamede S. (2013) Cognitive debiasing 1: origins of bias and theory of debiasing. BMJ Qual Saf: bmjqs-2012-001712.

De Bassa Scheresberg C. (2013) Financial literacy and financial behavior among young adults: Evidence and implications. Numeracy 6: 5.

De Bondt WF, Muradoglu YG, Shefrin H, et al. (2015) Behavioral finance: Quo vadis?

Doran JS, Peterson DR and Wright C. (2010) Confidence, opinions of market efficiency, and investment behavior of finance professors. Journal of Financial Markets 13: 174-195.

Epstein S, Pacini R, Denes-Raj V, et al. (1996) Individual differences in intuitive–experiential and analytical–rational thinking styles. Journal of personality and social psychology 71: 390.

Evans JSB and Stanovich KE. (2013) Dual-process theories of higher cognition: Advancing the debate. Perspectives on psychological science 8: 223-241.

Garcia MJR. (2013) Financial education and behavioral finance: new insights into the role of information in financial decisions. Journal of Economic Surveys 27: 297-315.

Gautam S and Matta M. (2016) Socio-demographic determinants of financial behaviour of individual investors in India. Journal of IMS Group 13: 38-49.

Glaser M and Walther T. (2014a) Run, walk, or buy? Financial literacy, dual-process theory, and investment behavior. Financial Literacy, Dual-Process Theory, and Investment Behavior (April 16, 2014).

Glaser M and Walther T. (2014b) Run, walk, or buy? Financial literacy, dual-process theory, and investment behavior.

Harrington C, Smith W and Bauer R. (2017) Influencing business student intent to use a personal budget. The Accounting Educators' Journal 26.

Jorgensen BL and Savla J. (2010) Financial literacy of young adults: The importance of parental socialization. Family relations 59: 465-478.

Kahneman D and Tversky A. (1979) Prospect theory: An analysis of decision under risk. Econometrica: Journal of the econometric society: 263-291.

Kane A, Marcus A and Bodie Z. (2007) Essentials of investments: McGraw-Hill.

Karpova D and Panova S. (2018) The study of investment preferences of Russians on individual investment accounts. Journal of Reviews on Global Economics 7: 626-644.

Keller J, Bohner G and Erb H-P. (2000) Intuitive and heuristic judgment-Different processes? Presentation of a German version of the rational-experiential inventory and of new self-report scales of heuristic use.

Klapper L, Lusardi A and Panos GA. (2013) Financial literacy and its consequences: Evidence from Russia during the financial crisis. Journal of Banking & Finance 37: 3904-3923.

Kotzé L and Smit A. (2008) Personal financial literacy and personal debt management: the potential relationship with new venture creation. The Southern African Journal of Entrepreneurship and Small Business Management 1: 35-50.

Lam D. (2015) Gender Differences in Risk Aversion Among Chinese University Students. Journal of gambling studies 31: 1405-1415.

Mandell L and Klein LS. (2009) The impact of financial literacy education on subsequent financial behavior.

Mattsson J. (2019) Investment behavior of bachelor level students.

Mousavi S, Gigerenzer G and Kheirandish R. (2016) Rethinking behavioral economics through fast-and-frugal heuristics. R. Frantz, S.-H. Chen, K. Dopfer, F. Heukelom, & S. Mousavi, Routledge Handbook of Behavioral Economics: 280-296.

Nguyen T and Schuessler A. (2012) Investment decisions and socio-demographic characteristics–empirical evidence from Germany. International Journal of Economics and Finance 4: 1.

Nomlala B and Sibanda M. (2020) Financial Capability of Accounting Students in South African Universities. Journal of Reviews on Global Economics 9: 200-215.

Osmont A, Cassotti M, Agogué M, et al. (2015) Does ambiguity aversion influence the framing effect during decision making? Psychonomic bulletin & review 22: 572-577.


Pennycook G, De Neys W, Evans JSB, et al. (2018) The mythical dual-process typology. Trends in Cognitive Sciences 22: 667-668.

Potrich ACG, Vieira KM and Mendes-Da-Silva W. (2016) Development of a financial literacy model for university students. Management Research Review 39: 356-376.

Rashid AAA, Jantan MS, Fairuz MAFA, et al. (2020) Financial Knowledge and Personal Financial Literacy in Investment Priorities Among University Students. Available at SSRN 3541998.

Rodrigues CS, Vieira FD, Amaral AMPdS, et al. (2012) Financial literacy of university students. Academic Conferences and Publishing International.

Shaari NA, Hasan NA, Mohamed R, et al. (2013) Financial literacy: A study among the university students. Interdisciplinary journal of contemporary research in business 5: 279-299.

Shahrabani S. (2013) Financial literacy among Israeli college students. Journal of College Student Development 54: 439-446.

Shefrin H. (2002) Beyond greed and fear: Understanding behavioral finance and the psychology of investing: Oxford University Press on Demand.

Shih T-Y and Ke S-C. (2014) Determinates of financial behavior: insights into consumer money attitudes and financial literacy. Service Business 8: 217-238.

Stanovich KE. (1999) Who is rational?: Studies of individual differences in reasoning: Psychology Press.

Toplak ME, West RF and Stanovich KE. (2014) Rational thinking and cognitive sophistication: Development, cognitive abilities, and thinking dispositions. Developmental psychology 50: 1037.

Tversky A and Kahneman D. (1975) Judgment under uncertainty: Heuristics and biases. Utility, probability, and human decision making. Springer, 141-162.

Tversky A and Kahneman D. (1985) The framing of decisions and the psychology of choice. Environmental Impact assessment, technology assessment, and risk analysis. Springer, 107-129.

Veena M. (2020) Influence of Behavioral Biases on Investment Behaviour of Women Investors–A Study on Hyderabad Karnataka Region. Studies in Indian Place Names 40: 440-454.

Volpe RP, Chen H and Pavlicko JJ. (1996) Personal investment literacy among college students: A survey. Financial Practice and Education 6: 86-94.

Xiao JJ. (2008) Handbook of consumer finance research. Springer New York.




How to Cite

Nomlala, B., Ogun, M., Chipeya, T., & Latiff, A. A. (2022). Dual-process theory and Investment Behaviours of South African Students. EuroEconomica, 41(2). Retrieved from https://dj.univ-danubius.ro/index.php/EE/article/view/2029