Effect of Demographic Characteristics on Locus of Control, Personality Type and Financial Risk Tolerance among University Students in Pokhara

Abstract

Financial attitude and behavior on an individual may influence by the individual differences in term of demographic characteristics, locus of control, and personality traits. The aim of the paper was to determine the locus of control, personality type, and financial risk tolerance (FRT) among the university level students in Pokhara, as well as to examine the effect of demographic characteristics. To achieve the aim of the study a cross-sectional survey design was employed to collect primary data during the month of April and May 2025 by using structured questionnaire administrated via in-person and online platforms. A convenient sampling technique was applied to approach university students studying at different campuses in different programs. A 304 valid response was collected and used for analysis using descriptive and inferential statistical tools. Findings reveal that students generally exhibit an internal locus of control, with urban students demonstrating stronger beliefs in their ability to influence outcomes compared to rural students. The results showed no significant associations between locus of control and gender, academic level, monthly family income, and father’s academic level. Personality traits showed a Type-A personality in general however, male students showed slightly stronger Type-A personality. Financially, students tend to be cautious, preferring secure options such as bank accounts rather than engaging in riskier
investments. Fear of loss or reliance on luck in the students showed psychological barriers in the students contributing to risk-averse tendencies. Male and master’s level students showed greater financial risk tolerance (FRT) than female and bachelor’s level students, as well as the source of family income also influenced FRT. These results bring out the role of demographic and socioeconomic factors play in melding the psychological and financial behaviors of students. It therefore emphasizes the need to provide appropriate intervention support in reducing their stress, increasing their engagement, and lowering their financial risk aversion.