A Research On The Impact Of Financial Literacy On Family Financial Assets Allocation

With the continuous improvement of residents' disposable income and the gradual growth and development of capital market,households gradually have funds,consciously pay attention to capital market,participate in investment and financial management,and the financial characteristics of household asset allocation become more and more obvious.In this context,a large number of scholars at home and abroad have been devoted to the study of household asset allocation.Firstly,this paper summarizes the research related to financial literacy and household financial asset allocation at home and abroad,and systematically summarizes the meaning and measurement of financial literacy and the influencing factors of household financial asset allocation.The traditional factors affecting the allocation of family financial assets include demographic factors,age,gender,education level,marital status;family wealth income factors,such as family wealth scale,income level,real estate,self-employed industry and commerce;and regional characteristics,namely,regional,financial development level and economic development level.In addition,literature studies have found that the level of consumer financial literacy has a significant impact on household lending behavior,household financial behavior and household financial asset allocation,and has an inclusive effect.Therefore,this paper adds variables of financial literacy to the influencing factors model of household financial asset allocation,and systematically studies the impact of financial literacy on household financial asset allocation.Secondly,according to the results of consumer financial literacy survey report and individual investor status survey report,as well as the calculation results of China's household financial survey data,this paper analyzed the level of financial literacy of Chinese residents and the status quo of household financial asset allocation.Then,using the data from the survey conducted by the China Family Finance Research Center nationwide in 2013,we quantify the financial literacy index by principal component analysis and factor analysis.Using Probit,Tobit,Ordered Probit and OLS models,this paper empirically analyses the impact of financial literacy on market participation,the ratio of financial assets allocation and the diversity of family financial assets allocation,and does the heterogeneity analysis focusing on urban and rural areas.Finally,this paper summarizes the results of this study,and based on the generally low level of financial literacy in China and the fact that most households allocate financial assets mainly on riskless assets,the current situation of single allocation of household financial assets and empirical analysis conclusions,puts forward suggestions for the government,financial institutions and families themselves.Research conclusion shows that financial literacy has significant positive relationship with financial market participation,financial asset allocation ratio and diversity of financial asset allocation.The empirical results of comparative analysis between urban and rural areas show that the impact of financial literacy on household financial asset allocation is still significant in urban households.However,it has no significant effect on rural household financial market participation,the ratio of stock asset allocation and the number of stocks held by rural households.