In psychology, self-efficacy is an individual's belief in their capacity to act in the ways necessary to reach specific goals. The concept was originally proposed by the psychologist Albert Bandura.

Self-efficacy affects every area of human endeavor. By determining the beliefs a person holds regarding their power to affect situations, self-efficacy strongly influences both the power a person actually has to face challenges competently and the choices a person is most likely to make. These effects are particularly apparent, and compelling, with regard to investment behaviors such as in health, education, and agriculture.

A strong sense of self-efficacy promotes human accomplishment and personal well-being. A person with high self-efficacy views challenges as things that are supposed to be mastered rather than threats to avoid. These people are able to recover from failure faster and are more likely to attribute failure to a lack of effort. They approach threatening situations with the belief that they can control them. These things have been linked to lower levels of stress and a lower vulnerability to depression.

In contrast, people with a low sense of self-efficacy view difficult tasks as personal threats and shy away from them. Difficult tasks lead them to look at the skills they lack rather than the ones they have. It is easy for them to lose faith in their own abilities after a failure. Low self-efficacy can be linked to higher levels of stress and depression.