How social media and demographics shape overconfidence in financial knowledge among Gen Z and millennials in India

Investor protection and financial education have become increasingly important in today's rapidly evolving financial markets, where social media provides easy access to investment-related information. This study examines the association between social media influence and overconfidence in financial knowledge among young individuals in India, with a particular focus on demographic differences. Using secondary survey data from 5,587 respondents aged 18 to 37 across 20 Tier-II cities, we employ a probit model to analyse how social media exposure, financial knowledge and demographic characteristics are related to overconfidence bias. The results show that individuals working in the organised sector, those who are unmarried, and respondents with lower education levels are more likely to report that social media influences their financial decisions. Higher financial knowledge is associated with lower overconfidence, whereas greater reliance on social media is associated with higher overconfidence. Generational analysis further reveals meaningful differences between Gen Z and millennials. These findings highlight the essential associations between demographics, social media influence, and behavioural biases among young individuals. The study underscores the need for targeted financial education initiatives and policy measures, including greater oversight of online financial content, to support informed decision-making among young individuals in Tier-II Indian cities.