Abstract:
Understanding behavioural biases is essential for undergraduates, as it fosters
financial literacy and enables informed decision-making. Behavioural biases are well studied in developed economies but underexplored in South Asian undergraduate
contexts. Examining differences between faculties reveals how formal finance
education impacts students’ ability to manage behavioural biases and decision making patterns. This study aims to examine how specific behavioural biases impact
financial literacy among undergraduates and whether differences exist between
management and non-management faculties. The study specifically examines five
biases: overconfidence, representativeness, availability, loss aversion, and herding. A
quantitative approach was adopted under a positivist paradigm. Data were collected
through a structured online questionnaire from 367 undergraduates selected using
stratified random sampling to ensure adequate representation of both management
and non-management faculties, enabling valid comparative analysis. The instrument
was pre-tested and validated through expert review and reliability testing (Cronbach’s
alpha) before data collection. Data analysis included descriptive statistics,
independent sample t-tests, correlation, and regression analysis. The results indicate
that overconfidence bias has a significant positive impact on financial literacy, while
representativeness and loss aversion have a negative impact. Availability and herding
biases showed no significant impact. The academic year has a positive impact on
financial literacy, whereas gender shows no significant impact. The comparative
approach provides new insights into the role of academic background and reveals that
financial literacy is higher among management students compared to non management students, indicating that academic background influences financial
knowledge and behavioural patterns. Management students showed high
overconfidence (trust in personal judgement) and high herding. The results provide
practical insights for educators, curriculum designers, and policymakers to design
programs that impact financial literacy effectively across both student groups
