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The Wealthy Hand-to-Mouth in China

29 Pages Posted: 8 Dec 2016  

Zhen Cui

California State University, Los Angeles

Yalan Feng

California State University, Los Angeles

Date Written: April 22, 2016

Abstract

The wealthy hand-to-mouth are households who are poor in liquid wealth (e.g., cash and checking accounts) and rich in illiquid wealth (e.g., housing and retirement accounts), while the poor hand-to-mouth are poor in both wealth. Data from the China Household Finance Survey reveal the following facts about the country’s wealthy hand-to-mouth. First, they represent the majority of the hand-to-mouth households in China. Second, they have different wealth portfolios and demographic features from the poor hand-to-mouth. Last, they have larger consumption responses to income fluctuations than non hand-to-mouth households, after controlling for income, hand-to-mouth status, and other household characteristics.

Keywords: Hand-To-Mouth, Household Portfolio, Liquidity, Consumption, China

JEL Classification: D31, E21

Suggested Citation

Cui, Zhen and Feng, Yalan, The Wealthy Hand-to-Mouth in China (April 22, 2016). Available at SSRN: https://ssrn.com/abstract=2881578 or http://dx.doi.org/10.2139/ssrn.2881578

Zhen Cui (Contact Author)

California State University, Los Angeles ( email )

5151 State University Dr
Los Angeles, CA 90032
United States

Yalan Feng

California State University, Los Angeles ( email )

5151 State University Dr
Los Angeles, CA 90032
United States

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