The Influence Of Financial Literacy On Family Financial Market Participation

The changeable financial markets and a wide variety of financial products require better financial literacy from investors.By studying the relationship between financial literacy,risk preference,personal confidence in financial market products and services and household financial asset selection behavior,this paper aims to explore the influence and possible ways of financial literacy on behavior of household financial asset selection.Help to improve the financial literacy of Chinese residents and promote the rational participation of families in the financial market.This paper analyzes the level and structure of the financial literacy of urban households in China,and gives statistical description of the selection of urban household assets,allocation of financial assets and general situation of financial literacy.through mathematical model,analyzes the relationship among financial literacy,risk preference and confidence in Chinese financial market,and analyzes the different effects of risk preference and confidence on the choice of Chinese household financial assets.Discussion on the specific influence path of financial literacy on the allocation of financial assets in family.This paper finds that both subjective financial literacy and objective financial literacy have significant positive effects on the participation of urban households in the stock market,bonds,funds and insurance markets.The empirical results show that risk preference and confidence are the possible paths that subjective and objective financial literacy influence the participation of households in the stock,bond and fund markets,but not the possible paths that affect the participation of households in the insurance market.According to the conclusion of the empirical analysis,this paper holds that we should vigorously promote the popularization of financial knowledge,improve the overall financial literacy of residents.Diversification of financial education methods to enhance residents’ understanding ofdifferent financial products,residents’ financial literacy self-cognition ability,avoid the existence of overconfidence or risk avoidance,At the same time,financial market regulation should be strengthened to enhance residents’ confidence in financial market products and services.