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Social Network And Age Structure’ Influences On Household Financial Assets Choice

Posted on:2017-03-03Degree:DoctorType:Dissertation
Country:ChinaCandidate:S J ChaiFull Text:PDF
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Family financial asset allocation and its relationship with social network and age structure has been the important topic of academic circles. As the important part of family assets, it is attracting tremendous attention that bank savings, stocks, funds and house property are affected by the informal system and the aging of population. However, limited by constraints such as data, most of the domestic related researches was more confined to theoretical level, some empirical researches based on maro-data were faced with “additivity” problem, the research of this field need to promote vigorously. Based on detailed microscopic household survey data, this article carefully examined the influence of social network and age structure on family financial asset allocation under the premise of full control of a series factors such as human capital, the wealth effect and other family demographic characteristics, and comed to the mainly following conclusions:This paper inherited the stock investment’ balance theory framework builded by Cao et al.(2005), and introduced the variable of family social network into the optimal model of stock investment by endogenous processed resident’ uncertainty preference, theoretically researched the effect mechanism of family social network on stock market participation. The research result show that the degree of families’ risk aversion(or uncertainty preference) will decrease(or increase) both for uncertainty aversion families and uncertainty preference families with the improvement of social network, residents will be showed stronger tendency of market participation, and their participation of stock market is deeper. Base on 25 province’ household survey data of Chinese family financial survey(CHFS), the empirical test also further confirmed that the families owning more social relation network are more likely to participate stock market, and the proportion of stock assets in their financial assets will be higher once participating stock investment.This paper also systematically studied Chinese household folk lending behavior from the perspective of social network under the unified framework for the first time. The study found that social network promote families participating in folk lending activities in Chinese rural society. Considering theregression results may be disturbed by some factors such as omitted variables and reverse causation, using “whether is the local popular surname” as the tool variable of families’ social network, IV Probit model and IV Tobit model regression results show that the variable of social network has significant positive influence for the probability, the amount and the degree of families’ folk lending participation, and the conclusion is sound.In terms of assets allocation efficiency, this article inspected social network’s contribution to household assets allocation efficiency, more importantly, this paper systematically surveys the effect differences of social capital between different regions and between urban and rural families. We find that families’ social network significantly improves the efficiency of household asset allocation, and estimation result using instrumental variable further confirmes that the families owning more social network are more effective in portfolio. In addition, urban families’ portfolio is more effective compared with rural families, but asset allocation efficiency doesn’t exist significant differences between east regions and middle-west regions. At last, in midwest area and rural, social network has a more positive effect on the efficiency of household portfolio.About the influence of age and age structure for families’ assets choice behavior, We find that families that householder’ age is over 60 allocate more of their wealth on real estate investment and bank deposit than risky assets such as stocks and funds. The proportion of elderly members in family increases the investment amounts on bank deposits and house properties, but it is negatively associated with the holdings of stocks, funds and other risky financial products. The paper further finds that the negative effects of age structure on families’ stock and fund investments are stronger for families in the central and western regions than those in eastern region. In contrast, the marginal effects of population aging to increase real estate investments of families are weaker in central and western region than in eastern region, and the influence of age structure doesn’t exist significant difference between regions in term of bank saving. Meanwhile, age and age structure can affect families financial investment decision by reducing household risk preferences and improving household precautionary savings.This article’ theoretical research and empirical findings provide a new policy perspective for Chinese capital market development: the social network and population structure perspective. Families is the basic unit of economic society, and the healthy development of capital market need active participation of micro-residents. However, the formation of residents’ investment decision is not the result of isolated individual heterogeneity, and it is easily affected by their institutional environment. In the condition of social transition that the current market mechanism is not sound, how to encourage interaction between families and enhance their social network, how to implement the match of financial innovation and social network, how to guide the formation of social norms that is helpful for improving residents’ investment efficiency, these are the issues that need consider for more systematic government policy. In the meantime, government further consummates Chinese social insurance mechanism, this can partly reduce the negative effect of elderly residents’ uncertainty for expect expenditure, and help elderly residents to use worry-freely various financial tool for constructing nearly rational portfolio and reduce the welfare loss.
Keywords/Search Tags:Social Network, Age Structure, Assets choice, Market Participation, Risk Preference
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