The Impact of Financial Knowledge on the Allocation of Household Assets - Evidence from China

20 Pages Posted: 7 Mar 2019

See all articles by Hongming Zhang

Hongming Zhang

Centre for Monetary and Financial Studies (CEMFI); South China University of Technology

Yanqiang Qiu

South China University of Technology

Date Written: February 17, 2019

Abstract

This paper studies the impact of family finance knowledge on household asset allocation through China Household Financial Survey Data (CHFS). The study found that the increase in family financial knowledge will significantly increase the diversity of household asset allocation and promote more family participation in financial markets. This conclusion is still significant after being subdivided into money market and capital market. In addition, this paper also finds that household purchase of self-owned housing has a significant crowding out effect on its investment financial market. The increase in education level and risk appetite will increase the diversification of household asset allocation, and the ability of households from rural areas in China to take risks is lower, its assets are mostly deployed in the lower risk currency market.

Keywords: financial knowledge, family asset allocation, family finance

JEL Classification: J13 G11

Suggested Citation

Zhang, Hongming and Qiu, Yanqiang, The Impact of Financial Knowledge on the Allocation of Household Assets - Evidence from China (February 17, 2019). Available at SSRN: https://ssrn.com/abstract=3336141 or http://dx.doi.org/10.2139/ssrn.3336141

Hongming Zhang (Contact Author)

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

South China University of Technology ( email )

Wushan
Guangzhou, AR Guangdong 510640
China

Yanqiang Qiu

South China University of Technology ( email )

Wushan
Guangzhou, AR Guangdong 510640
China

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