Research On The Behavior Of Assets Substitutability Of China Residents Sector

In recent years, the fast development of China's financial and real estate offers a variety of assets selection for the large number of saveings held by residents of China. How to distribute these savings between various financial assets and real estate asset? What are the relationships among these assets? Which reason causes residents to substitute one asset with another? The research of this paper on the residents assets substitutability will answer these questions. And the answers of these questions will not only help us to understand the mechanism of changes in financial assets scale, but also have a great significance on our country's maintaining financial stability and controling of real eatate price growth.The research of this paper on the residents assets substitutability can be devided into two parts, the first is research on the measure of assets substitutability and the second is the reason research on assets substitutability. Chapter II is the literature reviews on assets substitutability. Chapter III is the theory research on assets substitutability, incluing the definition of assets substitutability and the properties of assets substitutability, etc. Chapter IV is the measure of our country's residents asset substitutability, including the derivation of asset substitutability theoretical model, the method of measure asset substitutability and the empirical research of our country's household sector asset substitutability. Chapter V is the construction of synthesize index on character analysising of oue country's household sector asset substitutability, it is a summary of chapter IV's empirical results. Chapter VI is the causes analysising of asset substitutability, including classfied assets substitutability reasons and total size of assets substitutability reasons. Chapter VII is the problems summary and policy recommendations.Via the summary of chaper II, there is a common defect in the existing literatures in the assets substitutability measurement which is that equate assets with ordinary commodities. The existing literatures only studied on the substitutability leaded by the changes of returns or user costs, and ignored other factors which also have impacts on assets substitutability such as relative risk and relative liquidity of the assets and so on. So the measurements of assets substitutability in existing literatures were not comprehensive. And in this paper a new measure approach will be constructed which will overcome this defect. In chapter IV, inspired by the theoretical model of Chetty (1969), a new theoretical model of assets substitutability is self-derived. Then based on the definition of assets substitutability in chapter III, a new measure approach of assets substitutability is designed by the coefficients in theoretical models. And then empirical analysis is done among savings, stocks and real estate asset use data of our country's from1st Quarter1999to3rd Quarter2009. The measurement approach of assets substitutability in this paper has two advantages compared with other methods. The first one is the result satisfied the law of total assets still have the same size. And this is consistent with the essential meaning of substitutability. But the substitie elasticity is difficult to do this. The second is that the method in this paper measure assets subtititutability caused by all reasons, which is different from the existing method which measure the substitutability caused by the changes of returns or user costs only. So it is more comprehensive. The definition of assets substitutability, the derivation of theoretical model on assets substitutability and the design of assets substitutability measurement, all of these embody the innovation ideas of this paper.The main conclusions after the measuring our country's household sector assets substitutability in chapter IV are as follows. First, saving substitutes other assets, and the unit changes of savings substitutability in real estate asset is greater than stock; Second, there is a complementary relationship between real estate asset and stocks, and the additional changes of stock asset caused from unit changes of real estate asset is larger than the contrary.Chapter V is a summary of chapter IV's assets substitutability empirical results. In order to have a better describe of the dynamic changes on assets substitutability's intensity, in this chapter a synthesize index system of assets substitutability is constructed, and also this is one of this innovations.Chapter VI is empirical research on the reasons of assets substitutability, then obtain some guidance of policy conclusions. Such as the changes of CPI or rate will lead a greater impact on the residents's purchasing of real estate asset than purchasing of the stock asset.Chapter VII is the summary of the first six chapters and some recommendations are made. The study of this paper has found some problems on household sector assets substiton just as follows. First, Savings is still the main choice of residents's asset selection, the diversification of assets has not been achieved and this will helpless for the stablitity of the stock market; Second, the real estate needs of the residents are mainly home use, demand stronger rigidity, So the real estate price control task is arduous; Third, the real estate asset has shown some investment demand property, but it's investment demand property still weaker than stock; Fourth, the current real estate prices have been achieved a certain high level, this will lead residents to choice savings or stocks which is helpless for domestic demand expand and the stable of stock market, it is imperative to curb the fast growth of property prices; Fifth, the stocks demand of our country's residents is obvious speculative; Sixth, inflation and real estate price increase will lead a growth pressure in real estate asset and stock market fluctuations, etc.