A Research On The Influence Of Household Income, Asset And Debt On The Investment Risk Attitude

As a hot research direction,family finance has attracted extensive attention of scholars in recent years.With the growth ratio of household income slowing down and the household sector leverage ratio going high,the risk attitude of Chinese households will probably change.As an important influencing factor for families to make investment decisions,risk attitude has a very important impact on the asset allocation of individuals.Therefore,studying the relationship between household income,assets,liabilities and their risk attitudes can help us to observe the micro operation of China economy.The paper firstly illustrates the background of Chinese household income,assets,liabilities and reviews relevant domestic and foreign literature,putting forward the ideas and framework for the research.Secondly,the paper introduces the regression model and the relationship between household wealth factors and risk attitude is studied by using the data of China Household Finance Survey(CHFS 2011).Thirdly,I introduce instrumental variables to test the possible endogenous problems in the regression model.At the same time,this paper imported the data of the Survey of Consumer Finance(SCF 2016)into the regression model to verify the robustness of the regression results,and compares the similarities and differences of the regression results between Chinese and American families.The results of this paper prove that high income,rich asset and high liabilities are related to risk preference.Based on this conclusion,we provide some suggestions for the government and financial institutions.From the perspective of the government,it is necessary to raise household income and encourage more Chinese families to participate in financial market investment.From the perspective of financial institutions,financial products with different degrees of risk should be provided for families with different levels of wealth.