Research In Wealth Effect Of Household Financial Assets Of Urban Residents In China

Since China's reform and opening up,its economic conditions and people's living conditions have been improved greatly,however,the problem of insufficient domestic demand has always existed.The financial crisis has dealt a huge blow to China's economy and finance,which forces China to gradually get rid of long-term dependence on investment and export,and to promote sustained and rapid economic development by expanding domestic demand.Wealth effect theory,which studies the impact of asset price changes on the consumption,is an important part of consumer function theory and has economic importance.On China's current development stage,the rural residents still have a single family property structure,the rural financial market is still imperfect,and farmers have little chance to participate in the stock market and other financial market.Hence,the focus on the research of the wealth effect of the urban residents' household finanical assets(mainly including the stock assets and the bank savings assets)is in the accordance with China's national conditions.On the base of the mature theory of foreign countries and the relevant empirical researches both at home and abroad,this paper combs the existing consumer function theory,and then selects the appropriate theory as the theoretical basis of the study.In addition,based on the econometric method,this paper modifies the model and establishes a suitable model to analyze Chinese urban residents' wealth effects.What's more,it uses scientific method to study the wealth effect of the household financial assets,and analyzes the results.Finally,the article puts forward some feasible suggestions to enhance the wealth effect of residents' assets.Based on different kinds of data,the time series model has been set up to analyze the overall state of the wealth effect of urban residents' equity assets and the panel data model has been set up to analyze the regional difference of the wealth effect of the deposits of urban residents.According to the empirical results of time series model,the following conclutions are drawed.First of all,the disposable income is a key factor to promote urban residents'consumption.In additon,the wealth effect of urban residents' stock assets is positive but extremely weak.Therefore,this paper proposes to stabilize the stock market,expand the size of the stock market and improve the financial supervision system of the stock market system.According to the empirical results of the panel data model,the wealth effect of the deposits of urban residents is significantly negative in most parts of the country.Therefore,this paper proposes to increase urban residents' disposable income,improve the urban residents' security system and continue to steadily promote the market-oriented interest rate reform.In the end,the paper comes up with the thoughts of follow-up studies.