Research On The Influence Of Cognitive Ability On Rural Household Debt Behavior

In 2021,the CPC Central Committee stands at the new starting point of the intersection of "two centuries" and aims at the realization of the next grand goal of "common prosperity".Two years later,the government work proposal of the first session of the 14 th National People’s Congress in 2023 pointed out that the channels for rural residents to increase income and get rich should be expanded.With the acceleration of urbanization,credit plays an important role in expanding the channels for rural families to get rich,improving rural family income and promoting the realization of common prosperity.However,rural households face more severe credit constraints.According to the latest data of China Family Panel Studies(CFPS),for rural households with credit constraints,only 28.58% of households can participate in credit activities when faced with credit constraints,and 55.98% of households with zero credit scale account for as high as55.98%.So,what is it about rural household credit that makes it so grim? And how does that work?In view of the above problems,on the basis of summarizing the existing theories,based on bounded rational decision theory,cognitive bias theory and information asymmetry theory,this paper constructs the theoretical analysis framework of cognitive ability on rural household credit behavior,and puts forward the research hypothesis of this paper.On this basis,using the 2014 and 2018 survey data of China Family Longitudinal Survey Database(CFPS),this paper empirically studies the impact of cognitive ability on rural household credit behavior by using fixed effect model,and verifies the mechanism of cognitive ability influencing rural household credit behavior.The main conclusions of this paper are as follows:(1)The basic regression results show that cognitive ability has a significant effect on rural households’ formal credit participation,formal credit scale and informal credit scale,but has no significant effect on rural households’ informal credit participation.(2)The mechanism analysis shows that cognitive ability can affect rural households’ formal credit participation,formal credit scale and informal credit scale through financial literacy.(3)Heterogeneity analysis shows that the impact of cognitive ability on rural households with different characteristics is different.Based on the above research results,from the perspective of improving the cognitive ability and financial literacy of rural residents and building an orderly,open and diversified financial system,this paper puts forward relevant policy suggestions for solving the credit constraints of rural households and helping to achieve the goal of common prosperity.