The Influence Of Demographic Structure On Household Financial Investment

Chinese economy has experienced fast growth since the reforming and opening up. However, Chinese financial market is still lacking of development. Indirect financing is the major character of Chinese financial market. According to the Chinese household Finance Survey(CHFS), only 8.84 percent of Chinese household are now participating in stock market. This phenomenon, is hard to explain for classical asset pricing theory.Using the data from CHFS at 2010, I hope to discuss about the impact of children and the number of children on the investment strategy of a family, and to analysis the influence of reforming of family planning.This paper discusses:the situation of Chinese household finance and the compare among the major countries on the world; the impact of the major characteristics of households, like the structure and the income, on the decision of whether to invest stock and other risky financial instruments; the impact of the major characteristics of households, like the structure and the income, on the decision of holding how much of invest stock and other risky financial instrumentsThis paper finds that, these is no significance impact of whether a household has children, however, in the household which has children, the number of children reduce the possibility of investing stock and other risky financial instruments significantly. Moreover, the value of stock and other risky financial instruments also reduce while the household has more children. To explain this phenomenon, I give some possible channel. Because the expectation of future consumption, parents will reduce the investment of risky assets. Besides these, I also consider the number of children unmarried, and the conclusion holds the same.