Factors Related to the Risk Tolerance of Households in China and the United States: Implications for the Future of Financial Markets in China

Hanna, S.D., Kim, K.T., & Zhang, L. (2019). Factors related to the risk tolerance of households in China and the United States: Implications for the future of financial markets in China. Financial Services Review, Forthcoming

41 Pages Posted: 5 Feb 2019 Last revised: 21 Feb 2019

See all articles by Sherman D. Hanna

Sherman D. Hanna

Ohio State University (OSU)

Kyoung Tae Kim

University of Alabama

Lishu Zhang

Shenzhen University

Date Written: January 23, 2019

Abstract

We analyzed factors related to the financial risk tolerance of Chinese households, using the 2011 China Household Finance Survey (CHFS). The risk tolerance question was similar to one in the U.S. Survey of Consumer Finances (SCF), and we found that CHFS respondents had slightly higher risk tolerance than SCF respondents, but the percent of households with stock assets was 9%, compared to 49% in the U.S. Our multivariate analyses found many household characteristics in the CHFS had effects on risk tolerance similar to those found in the 2013 SCF. We discuss implications for the future of Chinese investment markets.

Keywords: Risk Tolerance, Individual Investing, China Household Finance Survey, Survey of Consumer Finances

JEL Classification: D14, G11

Suggested Citation

Hanna, Sherman D. and Kim, Kyoung Tae and Zhang, Lishu, Factors Related to the Risk Tolerance of Households in China and the United States: Implications for the Future of Financial Markets in China (January 23, 2019). Hanna, S.D., Kim, K.T., & Zhang, L. (2019). Factors related to the risk tolerance of households in China and the United States: Implications for the future of financial markets in China. Financial Services Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3320905

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

Kyoung Tae Kim

University of Alabama ( email )

312 Adams Hall
Tuscaloosa, AL 35487-0001
United States

Lishu Zhang

Shenzhen University ( email )

3688 Nanhai Road, Nanshan District
Shenzhen, Guangdong 518060
China

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