A Research On The Wealth Effect In Chinese Stock Market: Based On VAR Model

Stock market wealth effect reveals the interrelationship between the stock market and consumption. Based on the stock market wealth effect theory and the related research results, the article analyzes the stock market wealth effect in China from the qualitative and quantitative angle.For one thing, qualitative analysis discovery that there is no overall stock market wealth effect in China, but it has the gradual wealth effect. For another thing , it is possible that the wealth effect is improving after the reform of shareholder structure.Firstly, quantitative analysis discovery that there is no stock market wealth effect in China, stock market has a replacement effect to consumption. Secondly, in terms of stage, there is an existence of positive and negative wealth effect, besides, negative wealth effect is greater than the positive effect, that is to say, the wealth effect of the non-symmetry. Thirdly, the stock market wealth effect has improved after the reform of shareholder structure.According to the above analysis, the paper starts with the stock market wealth effect from the basic conditions. Then it explains the reason for the replacement effect from the psychological expect. Finally, the paper explains the reason for the effect of non-symmetry from the current situation of China's investors on the distribution of income. To address the above constraints, the article raised the corresponding policy recommendations.