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College Students, Intimidation, and Market Knowledge Part II


Intimidation acts as a signficant drag on market knowledge, awareness, and interest among college students.


I'm just a wandering on the face of this earth
Meeting so many people
Who are trying to be free
--Moody Blues

Previously we summarized the motivation behind a study of perceptions of intimidation and college student market awareness. Here, we share how our hypotheses were tested and what we learned.

Sample & Measures

A sample of 157 undergraduate students was obtained from the College of Business at Northern Kentucky University. Participants completed a questionnaire that required students to rate perceived levels of market intimidation (e.g., 'Financial markets make me feel uneasy.'), interest (e.g., 'I have interest in how markets work.'), and awareness (e.g., 'I have a good grasp of financial market conditions.') on a 1 (strongly disagree) to 5 (strongly agree) scale. Analysis of these psychometric scales (Nunnally & Bernstein, 1994) suggested that they possessed acceptable construct validity. The questionnaire also included a 48 item 'market knowledge' section to assess student familiarity with market terms, definitions, and context. Control variables included age, gender, class standing, and market experience.


The mean level of intimidation among study participants was 2.54, or below the midpoint on the 1 to 5 rating scale. The mean level of interest was 4.01. These results suggest that college students may not feel extremely intimidated by financial markets and possess relatively high levels of market interest.

What do undergraduate college students know about financial markets? The mean of the self-rated measure of market awareness was 2.60 which was below the rating scale midpoint. Student familiarity with 16 terms (e.g., price to earnings ratio) rated on a 1 (not familiar at all) to 5 (very familiar) scale averaged 37 out of a possible 80 points (46%). Fourteen questions asking students to match terms (e.g., Dow Jones Industrial Average) with definitions resulted in an average of 6.1 correct answers (44%). Eighteen multiple choice questions surveying understanding of current market context (e.g., approximate price level of S&P 500) resulted in an average of 2.7 (16%) correct answers. These results suggest a generally low level of market knowledge and awareness among college students in this sample.

To examine Hypothesis 1, four multivariate regression models were estimated using the various measures of student market knowledge (self-rated market awareness, familiarity with market terms, understanding of market definitions, understanding of current market context) as the dependent variables. In addition to the control variables, the measure of intimidation was included as an independent variable in each model. In all models, the beta coefficient of the intimidation variable was negative. In simple terms, this means that as intimidation went up, market knowledge and awareness went down. The p-values of the beta coefficients estimated for intimidation in each model ranged from 0.117 down to 0.000 (marginally significant to highly significant). Adjusted R2 ranged from 0.19 to 0.58, suggesting that respectable amounts of variance in market knowledge and awareness was explained by the independent variables. Overall fit of the four models was excellent (p < 0.001 for all F tests). These results provide strong support for the negative relationship between intimidation and market knowledge in Hypothesis 1.

To examine Hypothesis 2, an additional regression model was estimated using market interest as the dependent variable and intimidation as the independent variable (control variables were added as well). The resulting beta coefficient of intimidation was negative and significant (b = -0.238, p = 0.002). The model was highly significant (F = 8.63, p < 0.001) with considerable amount of variance explained (R2 = 0.284). The significant negative relationship between intimidation and interest supports Hypothesis 2.


Our findings suggest that, although college students may not profess to be highly intimidated by financial markets, the intimidation that does exist acts as a significant drag on market knowledge, awareness, and interest among college students.

Of interest, of course, is how to mute the negative effects of intimidation on financial market learning. One approach might involve reducing the level of perceived threat emanating from financial markets, since threatening situations can foster feelings of intimidation (Seabrook, 2004). However, if accomplished by decreasing a student's sense that markets are a potential source of capital loss, reducing perception of market threat may be unwise. Ignorance of risk may lead to overconfidence in one's market abilities and, ultimately, to painful economic consequences (Daniel et al., 1998; Stone, 1994). More leverage may be gained by introducing factors to increase market interest and market exposure.

Minyanville's core vicarious learning platform offers great potential in this regard. Vicarious learning permits novices to learn by observing role models in action (Manz & Sims, 1981). Vicarious learning processes are particularly effective for developing deep-seated intelligence when the knowledge to be transferred is largely tacit (Leonard & Swap, 2005)-such as the complex knowledge necessary to make decisions in many financial contexts. Seemingly, Minyanville's capacity for allowing students to peer into the minds of financial professionals in real time offers an important cornerstone for the UMV campus.

In a future article, I'll share some research into the effects of exposure to the Minyanville platform on college student learning about financial markets.


Daniel, K., Hirshliefer, D., & Subrahmanyam, A. (1998). Investor psychology and security market under- and overperformance. Journal of Finance, 53, 1839-1885.

Leonard, D. & Swap, W. (2005). Deep smarts: How to cultivate and transfer enduring business wisdom. Boston: Harvard Business School Press.

Manz, C.C. & Sims, H.P., Jr. (1981). Vicarious learning: The influence of modeling on organizational behavior. Academy of Management Review, 6, 105-113.

Nunnally, J.C. & Bernstein, I.H. (1994). Psychometric theory. New York : McGraw-Hill.

Seabrook, M. (2004). Intimidation in medical education: Students' and teachers' perspectives. Studies in Higher Education, 29(1), 59-74.

Stone, D.N. (1994). Overconfidence in initial self-efficacy judgements: Effects on decision processes and performance. Organization Behavior and Human Decision Processes, 59, 452-474.

No positions in stocks mentioned.

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