What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account.
In 2014, the Japanese government introduced the Nippon Individual Savings Account (NISA) to encourage tax-exempt investment and asset accumulation. In January 2024, the NISA underwent significant restructuring to boost household savings in financial asset investments. Taking advantage of the launch...
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| Format: | Article |
| Language: | English |
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Public Library of Science (PLoS)
2025-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0313433 |
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| author | Takuya Katauke Mostafa Saidur Rahim Khan Yoshihiko Kadoya |
| author_facet | Takuya Katauke Mostafa Saidur Rahim Khan Yoshihiko Kadoya |
| author_sort | Takuya Katauke |
| collection | DOAJ |
| description | In 2014, the Japanese government introduced the Nippon Individual Savings Account (NISA) to encourage tax-exempt investment and asset accumulation. In January 2024, the NISA underwent significant restructuring to boost household savings in financial asset investments. Taking advantage of the launch of the revamped NISA, we analyzed data collected in late 2022 of 95,632 active investors in a leading securities company to explore their preferences in the previous NISA. Notably, investors exhibit a preference for installment NISA over ordinary NISA, indicating an inclination for long-term capital establishment through gradual investments in secure financial assets. Regression analysis reveals that installment NISA investors are typically female, older, married, or divorced, have lower educational qualifications, engage in part-time employment, have higher incomes, display risk aversion, maintain larger asset balances, and adopt long-term perspectives. By contrast, those favoring ordinary NISA tend to be male, young, married, and financially literate and to have lower incomes, higher asset balances, and shorter-term perspectives. This study advocates maintaining both NISA types, increasing the annual and total investment limits, and eliminating tax exemption periods. These measures would be advantageous for tax savings and capital formation. However, a robust financial education campaign is emphasized to encourage individuals to invest in financial assets, breaking the tradition of keeping funds idle. |
| format | Article |
| id | doaj-art-9ec7ea696d494cd785d1385628326b18 |
| institution | Kabale University |
| issn | 1932-6203 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj-art-9ec7ea696d494cd785d1385628326b182025-02-12T05:30:56ZengPublic Library of Science (PLoS)PLoS ONE1932-62032025-01-01202e031343310.1371/journal.pone.0313433What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account.Takuya KataukeMostafa Saidur Rahim KhanYoshihiko KadoyaIn 2014, the Japanese government introduced the Nippon Individual Savings Account (NISA) to encourage tax-exempt investment and asset accumulation. In January 2024, the NISA underwent significant restructuring to boost household savings in financial asset investments. Taking advantage of the launch of the revamped NISA, we analyzed data collected in late 2022 of 95,632 active investors in a leading securities company to explore their preferences in the previous NISA. Notably, investors exhibit a preference for installment NISA over ordinary NISA, indicating an inclination for long-term capital establishment through gradual investments in secure financial assets. Regression analysis reveals that installment NISA investors are typically female, older, married, or divorced, have lower educational qualifications, engage in part-time employment, have higher incomes, display risk aversion, maintain larger asset balances, and adopt long-term perspectives. By contrast, those favoring ordinary NISA tend to be male, young, married, and financially literate and to have lower incomes, higher asset balances, and shorter-term perspectives. This study advocates maintaining both NISA types, increasing the annual and total investment limits, and eliminating tax exemption periods. These measures would be advantageous for tax savings and capital formation. However, a robust financial education campaign is emphasized to encourage individuals to invest in financial assets, breaking the tradition of keeping funds idle.https://doi.org/10.1371/journal.pone.0313433 |
| spellingShingle | Takuya Katauke Mostafa Saidur Rahim Khan Yoshihiko Kadoya What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. PLoS ONE |
| title | What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. |
| title_full | What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. |
| title_fullStr | What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. |
| title_full_unstemmed | What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. |
| title_short | What determines investment in the Nippon Individual Savings Account? an investigation of Japan's tax-exempt investment account. |
| title_sort | what determines investment in the nippon individual savings account an investigation of japan s tax exempt investment account |
| url | https://doi.org/10.1371/journal.pone.0313433 |
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