The Impact Of Financial Knowledge On Family Financial Behavior Of Urban Residents In China

Since the reform and opening up,China’s economy has maintained high-speed and stable growth.Family income,savings,consumption and debt have also increased substantially.The number of middle class in China has also continued to rise.The background of family wealth management has undergone tremendous changes.With the accumulation of household wealth and the rapid development of financial market,household financial transactions are becoming more frequent.Family financial behavior reflects the development of national economy.It is closely related to the fluctuation of real estate market prices,stocks,bonds and other financial markets,and its impact on the national economy is also growing.Therefore,it is of great significance for the healthy development of capital market and the construction of financial system to deeply explore the influencing factors of family financial behavior.Through theoretical analysis,statistical analysis,comparative analysis and econometric model,this thesis systematically studies family financial knowledge and family financial behavior.Using recently survey of Consumer Finance data of Chinese urban households,this thesis measures the financial knowledge level of urban residents by factor analysis,and analyses the financial knowledge level,stock market participation,return on investment and property income of urban households according to the characteristics of household education,gender,age,family region and monthly income.Combining the the Probit model,the Tobit and Order-Probit model based on instrument variable method to indentify the influencing factors of whether the family participates in the stock market,the rate of return on investment,whether it owns property income and the proportion of property income.It focuses on the heterogeneity of the influence of financial knowledge,and effectively solves the problems caused by missing variables,two-way causality and measurement errors.The research shows that most families’ understanding of various financial behaviors is still at a stage of little understanding and understanding,and the level of financial knowledge of urban households in China is generally low.Through statistical analysis,it is found that the financial knowledge of urban households is positively correlated with the educational level of household heads,the average level of financial knowledge of female household heads is lower than that of male households,the average level of financial knowledge of urban households shows an inverted "U" distribution with regard to age,and the average level of financial knowledge of household heads in eastern areas is higher than that in Western and central areas.Financial knowledge can promote family participation in the stock market,promote family ownership of property income and increase the proportion of family property income,but it can not improve the rate of return on household investment.Robustness test results show that the conclusion is still robust.Furthermore,the impact of financial knowledge on different risk preferences and different income families is different.Specifically,compared with risk preference and low-income families,financial knowledge can promote risk aversion and participation of middle-income,high-income families in the stock market.At the same time,Compared with risk preference and middle-income,high-income families,financial knowledge can promote risk aversion and low-income get more property income.The policy implication of this thesis is that the government should vigorously promote the popularization of financial knowledge,enhance family financial literacy,strengthen financial supervision,strengthen the protection of financial consumers,and optimize the investment environment.This is not only conducive to promoting family participation in financial markets,improving the level of family welfare,but also conducive to promoting the healthy development of financial markets.