Research On The Influence Of Financial Literacy And Risk Attitude On Family Financial Behavior

As a new research direction,family finance is more and more favored by domestic and foreign scholars.With the great enrichment of our residents ’income and the deepening development of the financial market,the financial products are constantly enriched,the financial environment is becoming more and more complicated,and household consumption and saving behavior,lending behavior have changed significantly.At present,the micro-structural problems such as uneven distribution of total household assets and structural imbalance are prevalent.Financial literacy as a key element for an individual to make financial decision,it has important influence on the residents of individual,family and even the entire social behavior.The improvement of financial literacy is an important measure to avoid the system risk.Studying the relationship between financial literacy,risk attitude and family financial behavior,aims to improve the residents’ awareness of financial literacy and risk identification,increases the scale of household wealth,improves the activity of family financial behavior,promotes the development of financial industry,and thus improves the whole social welfare.Therefore,this paper takes the method of establishing theoretical model,statistical analysis and empirical research to study the intrinsic relationship between financial literacy,risk attitude and family financial behavior,and draws the following conclusions.Firstly,the theoretical model of the influencing factors of risk attitude is constructed by using the microscopic data of Chinese family financial investigation project,and the internal correlation between financial literacy and risk attitude is verified by empirical test.Secondly,we use the iterative principal component analysis method to construct the variables of financial literacy.Under the premise of controlling the relevant influencing factors,we will focus on assessing the influence of financial literacy and risk attitude on family financial behavior such as family total wealth,family car consumption and pension planning.The results show that when individuals have higher financial literacy,they will show higher risk appetite,increase their confidence in financial activities.Also,they will improve the information processing ability of investors,reduce the participation cost of family financial behavior,expand the total wealth of the family,and reflect the consumption preference of durable goods and promote the more active way of pension.Finally,based on the empirical results,we put forward some policy recommendations from three aspects: government,financial institutions and family.From the view of the government.firstly,the government should strengthen the education of financial knowledge and improve the level of financial literacy.Secondly,it improves income level and wealth,develops reasonable income structure.Thirdly,it improves the old-age insurance policies and related welfare system.From the view of financial institutions,they should provide appropriate financial products and provide investors with certain financial information or lectures and so on.From the investor’s perspective,we should strengthen to learn the financial knowledge and skills,and choose a reasonable allocation of household assets and draw up reasonable pension plan.