An Empirical Analysis Of Chinese Residents’ Stock Investment Behavior

This paper is based on the behavioral finance theory, and analyzes the behavior biases thatthe individual stock investors have through questionnaires. In specifically, this paper introducesthe theory of behavioral finance by describes11behavior biases and Prospect Theory in specificlogic order, and compares the behavioral finance theory with the standard one, then concludesthat research the behavior of stock investors based on behavioral finance theory is more realisticand suitable. This paper also builds a database using the data of211questionnaires, and findsthat majority of the sample residents are young, single, well-educated, low-income and male, andthey obviously have7cognitive biases such as Certainty Bias and so on. Based on this finding,the fourth chapter designs three different models to analyze the investment behavior of Chineseresidents from the following aspects: the possibilities of investing stocks, the proportion of stockinvestment in household assets, and the return of stock investment, and finds that one’s charactersuch as age, and one’s bias such as Certainty Bias have significant impact on stock investmentbehavior. Finally, this paper organizes the conclusion, and provides the advices both for therelative departments and the individual stock investors.