The Chinese Stock Market Wealth Effect In Empirical Research

Since the 21st century, Chinese stock market with the high speed development of economy has become the indispensable part of the rapid growth of modern financial market. The stock proportion in the asset structure of urban residents increases every year,so the function of the stock market has not only limited in the fund-raising, optimize the allocation of resources, etc., financial asset prices volatility on the macro economy as well as the influence of individual citizens have become increasingly prominent. Researching wealth effect of stock market wealth to reveal a change in the stock to the impact of consumer spending.For a long time,economic development rely on exports because domestic weak consumer demand.Subprime mortgage crisis in 2008 forced us to change the existing economic structure,at the same time,the state council put forward stimulating domestic consumption to boost the sustainable economic growth strategy,which makes the research in Chinese stock market wealth effect more realistic significance.This paper systematically expounds the related theory of stock market wealth effects, including how to define wealth, the traditional and modern meaning of stock market wealth effects, characteristics and conduction mechanism of stock market wealth effects etc.Through the Consumption Function theory in detail,then use the life cycle --- permanent income hypothesis as the theoretical basis,and construct regression model to test China's stock market wealth effect. Hope that by using the improved model and the latest market data and uniform diameter of the index system, to do some analysis for existence,asymmetry and the influence degree of investor confidence in the range of China's stock market.This conclusions are as follows:investor confidence affect consumption to some extent; China's stock market within the wealth effect is weak in the urban place; asymmetry of stock market wealth effect is abnormal obviously,which are closely related to investors quality,market mechanism and other factors. Because China's stock market itself still exist many factors which restricting wealth effect of normal exertion. Finally, the stock market for the perfect and promote the wealth effect to develop,on the following relevant recommendations:stabilize the market, establish investor confidence; improve the quality of listed companies; strengthening the supervision, perfect the legal system; actively adjust the stock market beneficiaries structure to realize dividends with more people.