Jurnal Dinamika Manajemen, 10 (1) 2019, 14-31 http://jdm.unnes.ac.id Nationally Accredited based on the Decree of the Minister of Research, Technology and Higher Education, Number 36a/E/KPT/2016 Investment Interest and Consumptive Behaviour of Student Investors: Between Rationality and Irrationality Jandi Elriko Umboh1, Apriani Dorkas Rambu Atahau2 Magister Manajemen, Universitas Kristen Satya Wacana, Salatiga, Indonesia Info Article Abstract History Article: The purpose of this study is to examine the tendency to invest and consume among student in North Received 18 November 2018 Sulawesi. Phenomenon in North Sulawesi province showed an increase in the number of stock investors Approved 23 April 2019 dominated by young investors (university students). In making investment decision, they often act in Published March 2019 irrational way (herding behavior). In contrast, other phenomena demonstrated a consumptive behavior Keywords: of those young investors which contradict with investment interests. Populations of this research are 3468 Financial Literacy, Investment student investors at Indonesia stock Exchange Investment Gallery in the North Sulawesi province. Using Interest; Herding Behavior; Con- accidental sampling, the sample selected is 250 student investors. The analytical technique used is sumptive Behavior. Covariance Based Structural Equation Modeling (CB-SEM). The results showed that investment interest mediate the effect of herding behavior on consumptive behavior. It implies the need to educate student investors on the importance of minimizing the consumptive behavior. Minat Investasi dan Perilaku Konsumtif Investor Mahasiswa: Antara Rasionalitas dan Irrasionalitas Abstrak Penelitian ini bertujuan untuk mengkaji kecenderungan perilaku investasi dan konsumsi diantara pelajar di Sulawesi Utara. Fenomena di provinsi Sulawesi Utara (Sulut) menunjukkan peningkatan jumlah investor saham yang didominasi oleh investor pemula (mahasiswa). Dalam keputusan berinvestasi, investor mahasiswa sering bertindak secara irasional (herding behavior). Fenomena lainnya menunjuk- kan investor mahasiswa cenderung melakukan perilaku konsumtif yang bertolak belakang dengan minat investasi. Populasi dalam penelitian ini adalah investor mahasiswa yang tersebar pada Galeri Investasi Bursa Efek Indonesia (BEI) dalam universitas-universitas di provinsi Sulut sebanyak 3468 investor. Teknik pengambilan sampel menggunakan accidental sampling (non probability sampling) sebanyak 250 sampel investor. Teknik analisis yang digunakan adalah Covariance Based Structural Equation Modeling (CB-SEM). Hasil penelitian menunjukkan bahwa minat investasi memediasi pengaruh herding behavior terhadap perilaku konsumtif. Implikasi penelitian ini adalah perlunya edukasi terkait pentingnya meminimalkan perilaku konsumtif di kalangan mahasiswa sebagai investor pemula. JEL Classification: G3, G34 How to Cite: Umboh, J. E., Atahau, A. D. R. (2019). Investment Interest and Consumptive Behaviour of Student Investors: Between Ration- ality a nd Irrationality. Jurnal Dinamika Manajemen, 10(1), 14-31 Correspondence Address ISSN Jl Diponegoro 52-60, Salatiga 2086-0668 (print) 2337-5434 (online) Email: [email protected] DOI: 10.15294/jdm.v10i1.16837 Jandi Elriko Umboh & Apriani Dorkas Rambu Atahau/ Investment Interest and Consumptive ... INTRODUCTION investors are classified as beginner investors, in- dicate that they have few investment frequency Financial literacy is the knowledge and experiences. This statement is supported by Za- ability to manage finances to improve welfare niarti et al. (2017) who found that most begin- (Akmal & Saputra, 2016) which includes kno- ner student investors at ISE Investment Gallery wledge of investment, saving, and consumption with AB Mitra Sinarmas Sekuritas in Province (Ariadi et al., 2015). Financial literacy also aims of West Java perform herding behavior due to to avoid someone from financial problems due the lack of investment experience (with the fre- to consumptive behavior. quency of investing as much as 1 to 3 times). Nowadays, financial literacy in stock in- In addition, allegations of herding beha- vestment becomes an interesting phenomenon vior were also due to the Manado people phi- for some university students in North Sula- losophy “it is better not to eat as long as it is still wesi province. This is indicated by the gaining stylish” describing a lifestyle that was provoca- number of stock investors in North Sulawesi tive, energetic, vulgar, materialist, egocentric, province in 2014 with 2,700 investors with a and hedonistic. As a real example of the philo- percentage 60.91%, while in the previous year sophy, when a neighbor buy a car, it is likely that only 1,678 investors (market.bisnis.com). This other neighbors will follow buy a car, although number continues to gain up to November 2016 through credit. This is done only to obey the there were 3,468 which were dominated by be- feeling of prestige, not to be outdone by other ginners, especially university students (market. people in society life, and if associated with bisnis.com). The increasing number of student stock investors among students, it is possible investors is inseparable from the breakthroughs for herding behavior to occur, because by ow- made by the Financial Services Authority ning feeling of a stock company, it might be able (FSA) province of North Sulawesi, Gorontalo, to create feelings of not being defeated among and North Moluccas; those are market deepe- students in North Sulawesi province. Observing ning strategies and strengthening infrastructure, this phenomenon, it is suspected that the raising as well as the hard work of Representative Office number of student investors is influenced by in- of Indonesia Stock Exchange (ISE) in Manado dications of herding behavior. which actively provides stock market education Meanwhile, students with high under- and establishes Investment Galleries in various standing level of financial literacy will increa- universities in North Sulawesi province. singly have an interest to invest (Ariadi et al, An increment of number of university 2015). The characteristics of person who is in- student investor in North Sulawesi province is terested in investing can be seen from their ef- affected by the tendency of irrational behavior forts to learn about a type of investment (pro- in stock investing. Irrational behavior in this stu- fits, weaknesses, investment performance), has dy emphasized on herding behavior. Intuitively, an extra time to learn about the investment and investor can be said herd if the investor invests effort to try to invest in the type of investment without knowing the decisions of other inves- (without doing analysis), even increase the va- tors, and will not invest when investors know lue (capital) of their existing investments (Kus- that other investors also decide not to invest. mawati, 2011). When investors are influenced by the decisions Although financial literacy, especially in of other investors, it can lead investors to the the realm of stock investment has become at- inaccurate investment decisions (Bikhchandani tractive for students in North Sulawesi province, & Sharma, 2001). but financial literacy in the realm of consumpti- The emergence of allegations of herding on has not become important for students in the behavior, consideration to that most student province of North Sulawesi, as most students 15 Jurnal Dinamika Manajemen, 10 (1) 2019, 14-31 (investors and non-investors) in North Sulawesi consumptive behavior among student investors province have tended to spend money to exces- as explained by (Imawati et al., 2013; Ariadi et sive consumption or consumption not for basic al., 2015; Harli et al., 2015). needs. The absence of personal financial literacy Some students from various regions in in the United States and cross-country students North Sulawesi province are known that they from various universities in US is caused by the often visit malls to buy fashion products or en- lack of systematic personal financial education joy culinary as their consumption matter (Ta- in US (Chen & Volpe, 1998). warik et al., 2014). The buying behavior from Investment managers in developed students can be indicated as consumptive beha- countries did not show significant herding be- vior. A person who behaves consumptively will havior (Bikhchandani and Sharma, 2001). The use money inappropriately rather than spending weakness of herding behavior studies in Taiwan money on things that are more useful, so that (Demirer et al, 2009). The Indonesian stock this can cause financial problems (Ariadi et al., market and the Asia Pacific global stock market 2015). in general have indications of herding behavior Students who have allowance less than in market stress conditions, whereas in normal IDR 1,000,000 prioritizes consumption of basic conditions and returns are very high, there is no needs rather than consumption of extra needs indication of herding behavior (Wijayanto & (Ariadi et al, 2015). On contrary, a research Achsani, 2011). from Gumulya and Widiastuti (2013) found Significant relationship between financial that students with allowance less than IDR literacy, gender, and allowance with investment, 1,000,000 have higher consumptive behavior saving, and consumption levels (Ariadi et al, than students who have allowance more than 2015). Meanwhile, financial literacy and age had IDR 1,000,000. The Manado people’s lifestyle, a significant negative effect on consumptive -be which is provocative,