Development and Validation of the Scale of Psychosocial Factors in Economic Decision Making

The main objective of the present research was to develop and validate an indigenous self-report measure of psychosocial factors in economic decision-making. The sample comprised of 150 (men = 90, women = 60) business owners. Interviews were conducted through a self-constructed questionnaire. The items were derived from the transcripts of interviews. However, 36 items were selected for factor analysis. The 36 items were subjected to principal component analysis using the varimax rotation method. A total of 30 items defining cognitive, emotional, and social factors, which collectively accounted for 33.6% of the variance, were selected. Cronbach’s alpha for the cognitive factor was 0.77; for the emotional factor, it was 0.75; and for the social factor, it was 0.69. The findings hold implications for economists, psychologists, business professionals, and policymakers.