Research On Household Financial Behaviors And Wealth Inequality In China

This paper belongs to the field of household finance,focusing on the financial participation behaviors and the distribution of wealth of households in China by study the micro survey data,exploring the demographic factors affecting household financial behaviors,analysing quantitatively the dynamic relationship between participation and the distribution of wealth.While supplementing financial theory,the paper try to provide policy advice for government departments and practioners.It implies great significance for the critical institutional reforms and financial markets development in China,which aims at increasing capital incomes for its people.The article is divided into seven chapters.Each chapter is organized as follows:The first chapter reviews the background and significance of the article,putting forward the ideas and framework for research and the innovation of the article.The second chapter describes the micro survey data used herein,and based on the household survey data,provides a preliminary description of the characteristics of financial market participation behaviors and household wealth distribution,the main issues of this paper.Through analysis,it summarized the phenomenon of limited participation and wealth inequality for later study.The third chapter summarises the related literature systematically.First,starting from the limited participation behavior of households in the financial markets,it gives a comprehensive summary of the previous literature on this phenomenon,as well as the causes and impact.The second section summarizes the findings about household wealth distribution,including the inequality of wealth,the causes and effects.The third part focuses on the research on the dynamic role between household financial behavior and distribution of wealth.Through literature review,it gives a clear need for further research and theoretical and policy implications of this paper.The fourth chapter explores the internal driving factors of the impact of wealth on financial market behavior.By calculating the Arrow-Pratt absolute and relative risk aversion indicators,it analyses the relationship between risk attitudes and wealth,and its functioning channels.Chapter five researches on the relationship between household wealth and income structures,especially the impact of wealth on property income.Research focuses on the level and proportion of property income,since this indicator reflects the degree of household utilization of capital markets,paving the way for the next part.The sixth chapter focuses on the features and effects of portfolio investment behavior influenced by wealth.Combined with a high return on capital,this phenomenon is one of the important causes of increaing household wealth inequality,and this view is verified through analysis of survey data.Chapter ? summarizes the content and conclusions of the paper,discussing the policy implications of the study and the future direction and focuses.Through the empirical analysis,the main conclusions can be summarized as the following three points:First.studies have shown that the absolute risk aversion is the decreasing function of wealth,while the relative risk aversion coefficient is an increasing function,and thus rejected the commonly used economic assumption of the constant absolute risk aversion(CARA)and the constant relative risk aversion(CRRA)preferences.With the rise of wealth,the residents will increase the allocation of risky assets,even though the proportion of risk assets to total assets may decline.Further,I find that the impact of wealth on risk attitudes is no longer significant after controlling for background risk factors,implying that background risk is one of the working channels.Second,household with higher wealth has significantly higher property income,both narrow and broad,and this positive effect is greater at families with higher property incomes.This conclusion suggests that the richer family is more able to profit from the capital markets,which may be one of reasons for the growing concentration of wealth distribution.Third,studies have shown that household with higher wealth has more complicated portfolios,and are more inclined to hold risky and high-yield financial assets,real estate and private productive investment.Portfolio returns rises with increasing wealth,and richer family gets relatively higher income in the capital market,while households with relatively low wealth loss.Low net worth families "subsidy" high net worth families through their investment behavior.As a result,wealth inequality rises and social mobility decreases.Income tax on capital can ease the formation of this wealth inequality.Innovation is mainly reflected as:(1)A new issue.Previous studies analyzes the factors which can influence the behavior of investors in asset selection,while the paper proposed the dynamic mechanism and effects between the behavior of financial markets and distribution of wealth.This issue will bring a breakthrough in basic theory and methodology for Chinese investors to optimize the investment portfolio and improve property income;at the same time,it has important policy implications for the government to take effective measures to narrow the gap between rich and poor and achieve common prosperity.(2)Theories and methods of innovation,and the emphasis on policy research.The study will introduce important reference for family portfolio optimization and the government,so as to provide comprehensive and detailed theoretical and empirical support for the development of government policy and business of the financial sector promoting household wealth and narrow the wealth gap.