The Effect of Behavioral Finance on Stock Investment Decisions

Reliability Tests

Reliability Tests Reliability comes at the forefront when variables developed from summated scales are used as predictor components in objective models. Since summated scales are an assembly of interrelated items designed to measure underlying constructs. Cronbach's alpha is an index of reliability associated with the variation accounted for by the true score of the “underlying construct”.

Alpha coefficient ranges in value from 0 to 1 and may be used to describe the reliability of factors extracted from dichotomous (that is, questions with two possible answers) and/or multi-point formatted questionnaires or scales (i.e., rating scale: 1=poor, 5=excellent). The higher the score, the more reliable the generated scale will be. Cronbach's Alpha was used revealed that Cronbach's alpha coefficient was (0.871) for all items, and values of (α) range 0.821 to 0.915, which indicates that the questionnaire was reliable. The values of (α) of the study variables of were as illustrated in Table 2.