Household Asset Allocation Preferences And Structural Asset Bubbles

After Markowitz(1952)proposed a portfolio investment model.The practice of "not putting all eggs in one basket" has finally gained a reasonable theoretical explanation in the framework of M-V analysis.Tobin(1958)expanded the portfolio theory based on the "two fund separation theorem" in this analysis framework.SHARP(1962)has launched the famous capital asset pricing model(CAPM).Since then,the research on portfolio has been based on the assumptions of portfolio theory.M-V analysis paradigm is used in all research methods However,it is easy to find out when we carefully observe the behavior of household choice.The M-V analysis paradigm does not contain all the asset heterogeneity.In addition to expected return and risk,asset preference is another important factor that affects the choice of household assets,and this factor is ignored.Based on the systematic review of related studies,after analyzing the asset portfolio theory,the M-V analysis paradigm is extended to the research paradigm of "M-V+ asset selection preference"to construct the portfolio selection model,discuss the solution of the model and analyze the main influencing factors and measurement of household preferences.Meanwhile,based on the extended equation of quantity of money proposed by Professor Li Lasheng,this paper discusses the preference of household asset selection,the flow of capital and the formation of asset bubble and its structural characteristics.And empirical analysis is used to verify the preferences of household asset allocation,capital flow and real estate bubble in China.The study in this paper shows that,(1)China's households have evident property preferences in the process of asset selection.(2)the research paradigm of "M-V+asset selection preference"can not only better explain the portfolio selection of households,but also explain the reality of"different as night and day" in China's real estate market and the stock market.(3)the preference difference of household property choice determines the flow of social capital to a certain degree,and the agglomeration effect of capital flows further causes the unbalanced capital market capital attraction,as a result,the structural asset bubble becoming a normal state.(4)the main reasons that affect the choice preference of household assets include information asymmetry,wealth view and display function,safety guarantee in psychological account and social evaluation mechanism.