Research On The Impact Of Housing Wealth On Risk Financial Asset Allocation Of Urban Households In China

In recent years,the allocation of risky financial assets for families has received widespread attention.On the one hand,the government has proposed in the 14 th Five-Year Plan to "increase the property income of urban and rural residents through various ways".Therefore,the reasonable allocation of risky financial assets is of great significance to improving family wealth,promoting economic prosperity and realize the Chinese Dream.There are the high proportion of housing assets and the insufficient proportion of risky financial assets in urban household asset allocation in China.Considering the high proportion housing assets is closely related to China’s housing market environment,and the continuous unilateral increase in housing prices has led to an unprecedented enthusiasm of urban households to acquire housing assets,thus crowding out the share of risky financial assets allocation,It is necessary to explore in depth the impact of housing wealth on risky financial assets allocation of urban households in China.Based on the China Household Finance Survey(CHFS)data in 2015,2017 and2019,this paper first made a statistical analysis on the holding of housing assets and the allocation of risky financial assets and has a preliminary understanding of the allocation status of housing assets and risk financial assets of urban families in China.Secondly,a two-period portfolio selection model was constructed to explore the impact of housing wealth on risky financial asset allocation from two perspectives: the degree of diversification of asset allocation and the tolerance of risk aversion.Third,a two-way fixed-effects model was applied to applied to examine the effect of the influence of housing wealth on the allocation of risky financial assets of urban households from two perspectives: housing wealth and the proportion of housing wealth.Meanwhile,in order to deal with the problem of endogeneity,provincial housing prices were selected as the instrumental variable of housing wealth in this paper.Finally,the heterogeneity analysis of housing wealth affecting urban households’ risky financial asset allocation was conducted in two dimensions: housing units and regions.The findings of this paper:To begin with,urban households have the problem of unreasonable resource allocation,The high proportion of housing assets and the low proportion of financial assets.Also,most urban households still tend to invest in risk-free financial markets,and the phenomenon of limited participation in risky financial assets is significant present.Furthermore,the increase of housing wealth significantly promotes household risky asset allocation,while the increase of the proportion of housing wealth obviously hinders household risky asset allocation;Next,the "wealth effect" of housing wealth on risky financial asset allocation is more significant in households with multiple houses and in the eastern region,The "crowding-out effect" of the proportion of housing wealth for the allocation of risky financial assets is more significant in the households with multiple houses and in the central and western regions.Third,the "wealth effect" of housing wealth on risky financial asset allocation is more pronounced in the central and western regions for households with multiple homes.Based on the above findings,the following policy implications are drawn: On the one hand,The government guides the real estate market to change from rough development to high quality development and control the housing price within a reasonable range,so as to improve the status quo of high proportion of housing assets and truly play the role of the residential essence of housing to reduce the waste of idle housing resources.;on the other hand,to give full play to the role of the risk financial market platform,to popularize the correct concept of financial investment,and to change the over-saving and single type of investment.On the other hand,the government gives full play to the platform of risky financial market,to popularize correct financial investment concepts so that urban families can participate in the risk financial market better and urban family assets can be allocated more effectively and rationally.