Research On The Influence Of Family Endowment On Farmers’ Choice Of Risky Financial Assets

With the rapid development of China’s economy,the continuous improvement of the level of national income,more and more disposable assets,and the continuous improvement of the financial market,residents’ families have more and more strong demand for the choice of risky financial assets.Among them,farmers’ choice and investment in risky financial assets are also increasing.Classical investment theory points out that although the degree of risk preference is different,as long as the premium of risk assets is positive,families should hold a certain proportion of risk financial assets.However,the reality is that a considerable number of households in China have not allocated any risky financial assets.The limited participation and single investment of Chinese households in risky financial assets are obviously contrary to modern financial theory,especially in rural areas of China.Due to various reasons,the phenomenon of limited participation of farmers in risky financial assets is more common.A reasonable choice of risky financial assets can optimize the asset allocation and income structure of residents.It is the basis for the steady accumulation of wealth and is of great significance to narrow the income gap between urban and rural areas.Based on CGSS2018 data,this paper first systematically analyzes the current situation of Chinese farmers’ household risk financial asset selection,and then uses logit model and ordered probit model to empirically study the impact of family endowment on Farmers’ household risk financial asset selection from the perspective of family endowment from three dimensions: family material capital,human capital and social capital.This paper is divided into two steps: one is to use logit model to study which factors in family endowment will have a significant impact on Farmers’ choice of risk financial assets,focusing on the problem of "whether farmers will choose risk financial assets".Second,the ordered probit model is used to study which factors in family endowment will have a significant impact on the number of varieties of farmers’ risk financial assets,focusing on the problem of "how many kinds of risk financial assets farmers will choose".In order to ensure the reliability and robustness of this research conclusion,this paper also uses probit model instead of Logit model and multiple linear regression model(OLS)instead of ordered probit model for robustness test.It is found that the sign direction and significance of the estimated coefficients of each variable are basically consistent with the benchmark regression results,and the conclusion has not changed systematically,which proves the robustness of this conclusion again.The results show that:(1)annual family income,the number of houses owned,the number of cars owned,the number of years of education,the frequency of social activities with neighbors,the frequency of social activities with friends,the number of wechat friends,age and religion all have a significant impact on Farmers’ choice of risky financial assets.(2)Annual family income,the number of houses owned,the number of cars owned,the number of years of education,the frequency of social activities with friends,the number of wechat friends and religion have a positive impact on Farmers’ choice of risky financial assets,while the frequency of social activities with neighbors and age will reduce the probability of farmers’ choice of risky financial assets.(3)The number of permanent residents,the number of children,their health status,social trust level,political outlook,gender and marital status had no significant effect.Finally,based on the above research results,some policy suggestions such as "optimizing farmers’ family endowment and improving the financial market" are put forward.