HOW DOMESTIC MACROECONOMIC INDICATORS INFLUENCE RETAIL INVESTOR’S DECISION MAKING (EQUITY MARKETS)

Abstract

This study explores the impact of macroeconomic indicators—such as inflation, interest rates, and GDP—on individual investment decisions, with a particular focus on availability bias. Primary data was gathered through a structured questionnaire distributed via Google Forms, targeting individual investors in India. The research aims to understand whether and how availability bias affects how investors perceive and react to macroeconomic information. Statistical techniques such as regression analysis and correlation were used to determine the significance of various factors. Findings indicate that inflation and interest rate levels significantly influence investment preferences, especially for investors prone to availability bias. The study highlights a gap in investor education about how behavioral biases can lead to suboptimal financial choices. Recommendations focus on awareness-building initiatives, enhanced financial literacy, and policy-level interventions to improve rational decision-making in investing. The research adds to the growing body of literature on behavioral finance in emerging markets.