Analysis of Individual Financial Investment Decisions: Differences between East and West Germany

This thesis examines differences in individual financial investment behaviour between people who grew up in East and West Germany. Using survey data from 163 respondents in Germany, the study investigates investment participation, investment intensity, and portfolio diversification using logistic and linear regression analyses. The results show that individuals who grew up in West Germany are significantly more likely to participate in financial markets and hold more diversified portfolios than those from East Germany. In contrast, no statistically significant regional differences are found regarding the share of income invested. Contrary to much of the existing literature, financial literacy, risk tolerance, and social environment influences do not significantly explain investment behaviour in most models. The findings suggest that historical and structural factors linked to socialist socialisation and persistent regional inequalities continue to shape financial decision-making in Germany, even decades after reunification. Overall, the study highlights the enduring importance of regional background in explaining individual investment behaviour.