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The Influence Of Background Risk On Household Financial Assets Investment In China

Posted on:2017-12-01Degree:MasterType:Thesis
Country:ChinaCandidate:Y Q HouFull Text:PDF
GTID:2359330512474637Subject:Finance
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With the rapid growth of the income of Chinese residents,residents' total assets,assets structure and behavior have change a lot.Besides that,people' financial consciousness is greatly improved.So the demand for financial products increasingly diversified portfolio of assets.The continuous development of financial market meet the diversified investment needs of the residents,providing more investment instrument,therefore people can realize the accumulation of wealth through investing in financial products.The development of the financial market significantly affects the residents' investment structure.The influence on people' life creating by the behavior of asset allocation is also increasing.So it is very necessary to study the influencing factors of the behavior of financial asset allocation.According to the traditional portfolio theory,once the asset return and standard deviation are given,the degree of risk aversion will be the only factor that affects the distribution of investor's risk assets.The higher the degree of residents' risk aversion,the lower the possibility of investing in the risk financial assets.However,the empirical study finds that household risk financial asset investment and classic asset portfolio is not consistent,as most of families did not choose to hold stocks.This means that the influence factors of household risk financial investment are complex,not only depend on the asset's return,risk level and risk attitude,but also depend on family income,investment style,characteristics of family,social security level,and so on.The traditional portfolio theory is based on the perfect market hypothesis,and the incompleteness of the real market makes family investment behavior is complicated.Peoples' research on risk financial investment is more attention to the incomplete market,one of situation is based on background risk.Background risk refers to the risk that cannot be dispersed through the financial market transactions.In this paper,for the extension of the classical portfolio theory,the author made a discussion on the influencing factors of family risk assets allocation,which focused on analyzing the importance in the labor income risk,physical condition and real estate investment risk based on the prospective of background risk.The main contents of this paper are as follows:The first part is the introduction,including the background and significance of the topic,the brief review of domestic and foreign,the research content and methods,and the innovation and deficiency of the paper.The second part introduces the concept and connotation of family,background risk,family financial assets,and the related theory of family financial asset allocation.The third part introduces the current condition of China's family financial asset allocation,including the total condition and the structure condition,and put forward the existing problems.Except that,this part qualitative analysis the influence of background risk on the participation of family risk financial assets investment in China.The fourth part uses the regression analysis with the influence of background risk on the participation of family risk financial assets investment in China.The sixth part puts forward policy recommendations based on empirical analysis results.After the empirical research,this paper draws the following conclusions:residents with high labor income risk and real estate investment risk have a lower probability of financial assets investment.Residents who is poor health and do not own social medical insurance or commercial health insurance tend to invest more safe financial assets.There are other reasons.The degree of risk aversion,net assets,age and education level have a significant impact on the risk of financial investment,not including the gender The empirical findings of this paper have a wealth of policy implications.A variety of research methods have been applied in this thesis.Firstly,the qualitative and quantitative analysis.In this paper Probit model is used to analyze the impact of background risk on risk assets allocation.Secondly,the statistical method.We apply mean analysis to explain the status of household financial market participation and financial asset structure.Compared with the previous papers,there also will be some innovations.Firstly,In this article we used Chinese Household Finance Survey data to discuss the influence of labor income risk on the proportion of residents' risk investment;Secondly,we gave the complete statement and analysis of the influence of background risk on the proportion of residents' risk investment;Finally,we made a group in using the Chinese Household Finance Survey date,and used Probit model to get empirical conclusions.Also,because of the my own academic ability,some shortages exists.Firstly,the established model is not perfect.Liquidity constraints also play an important role in the household financial assets selection,but because of these data' untruthfulness,these variables are not contained;Secondly,the data the thesis used is the cross-sectional data,endogenity often occurs.Thirdly,there are many factors that affect the investment of household risk assets,in addition to labor income risk,physical condition and real estate investment which emphasized on by this paper,also including social security,life cycle,investment opportunities,wealth effect.With the limitation in space and time,this article does not contain these.In summary,there is room for further expansion of the research on the influence on the risk investment behavior.
Keywords/Search Tags:background risk, financial risks assets, labor income, health condition, real estate investment
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