Savings and investment behaviour of Hajj fund contributors : a case study of selected cities in Indonesia

Abstract

This research conducted an assessment on determinants that rationalize Hajj funds contributors’ savings and investment behaviour from a dual objective perspective towards needs fulfilment and religious-socio obligation as an obedient Muslim. Structural Equation Modelling employed in this research utilised independent variables adopted from Fisher’s Intertemporal Choice Theory and the Theory of Planned Behaviour. Both Fisher’s personal factors, saving horizon and impatience are the determinants of the Intertemporal Choice Theory, whereas religious beliefs and perceived behavioural control are the elements from the Theory of Planned Behaviour are explored. Furthermore, psychological variables and knowledge are two additional independent variables which are also assessed in this study. Moreover, moderation effects analysis were performed using the two variables: Fisher economic factors and product features; whilst multigroup analysis was conducted using different factors of demographic aspects. Primary data were collected from a sample of 408 individual contributors from two provinces who performed Hajj in 2016. It was found that both Fisher’s Intertemporal Choice Theory and the Theory of Planned Behavior could explain Hajj savings behaviour with reference to the significant findings of Fisher’s personal factors, saving horizon and perceived behavioural control. These theories were also able to explain Hajj investment behaviour through the presence of Fisher’s personal factors, impatience and perceived behavioural control. Risk adjusted return preference was the psychological factor that affected Hajj savings-investment behaviour. The moderation role of Fisher’s economic factors and product features in the model were also supported. The effects of Fisher’s Intertemporal Choice Theory, the Theory of Planned Behavior, and psychological factors are also significant across different across groups of age, gender, education, working status, income, house ownership and wealth.