The Study Of Urban Household Financial Behavior Of China—from The Perspective Of Household Balance Sheet

Debt levels and debt to asset ratios of chinese households are increasing rapidly.The rapid increase of household sector's debt levels and debt to asset ratios can be seen from several macro data indicators.Therefore,this paper attempted to study household fincial behaviors from the perspective of household balance sheet.Based on the shift of the asset to debt ratio of Chinese household sector,this paper propose a household sector debt sustainability issue.By employing a theoretical framework often used in analysis of public sector debt sustainability,this paper analysed the household sector debt sustainability.At the same time,this theoretical analysis also considered the demographic shift issue and households' house purchase expenditures.This analysis showed that aging population and the increasing house purchase expenditure to disposable income ratio will lead to enlarging of debt gap of the household sector.And this paper also test the above conclusion empirically,by suing panel data of Chinese provinces.The changes in asset prices affect the capital income and wealth accumulation of household significantly.As real estate,stocks and other asset prices rose rapidly,households which participated in these markets achieved a rapid increase in wealth.Especially those households using financial leverage such as mortgage benefited much more than other households which did not use any kind of financial tools,and household wealth inequality diverged.In the theoretical and empirical analysis on the household financial leverage,we introduced the index used for company's operation efficiency evaluation,and found that households with higher total assets tend to have higher asset return rates and lower debt costs,which lead wealth distribution to diverge.This paper gave some suggestions and police advices according to the analysis above.Macro data and micro survey data showed that more household take debt to buy houses,and less for daily consumption.Various credit sources are not used for smoothing household consumption,which could enable household to maximize lifetime consumption utility.This is very different from the Western consumer debt,as well as the theory life-cycle and credit constraint.In addition,empirical test shows that there will be a significant reduction in household spending on education and education expenditure ratio in the households with debt for purchasing houses.At the same time,families with education loans,the daily consumption rate will be reduced.When considered the housing dual role of consumption and investment,the impact of debt on housing and household consumption did not change significantly.In previous studies,the human capital is considered as the most important asset for most families,which is the main source of income for household,and is different from other types of assets.From the perspective of the household balance sheet,human capital can be seen as intangible household asset.Human capital include education,health and skills of household members.This paper empirically studies the impact of catastrophic disease of family member on the relative change of household health care expenditure,as well as the impact on participation in risky financial asset markets.The results show that family member suffering from catastrophic diseases will relatively increase household health care expenditure,and reduce the family's possibility of directly or indirectly partcipation in the stock market.The results also prove that catastrophic diseases influence the participation partly by lowering the perceived wealth of a household.Based on the empirical results,catastrophic diseases,as a debt from the viewpoint of the household balance sheet,can cause the deterioration of a household balance sheets,which means households have strong desire for fund from the impact of catastrophic diseases.As realized health risk,this paper takes the illness such as catastrophic disease of family members and other health problems as a kind of liability on household balance sheets.Finally,this paper proposes to solve the financial needs of household suffering from catastrophic diseases by securitization,and compare the two methods of securitization and insurance.