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Financial Literacy,Wealth Accumulation and Household Asset Allocation

7/1/2016 浏览量:778

Financial Literacy,Wealth Accumulation and Household Asset Allocation

WU Yu1,PENG Changyan2,YIN Zhichao3


(1.Survey and Research Center for China Household Finance, Southwestern University of Finance and Economics, Chengdu 610074, China;

2.School of Finance, Southwestern University of Finance and Economics, Chengdu 611130, China;

3.School of Finance, Capital University of Economics and Business, Beijing 100070, China)


[Abstract: This paper investigates how financial literacy affects household wealth accumulation and asset allocation by using 2013 China Household Finance Survey ( CHFS) data. Empirical analysis shows that some households with high financial literacy will allocate assets to financial assets,especially risk financial assets.At the same time,they decrease the allocation of non-financial assets but increase the investment on productive assets. Using quintile estimation method,we also find that financial literacy has a stronger effect on low asset household. Heterogeneity analysis demonstrates that financial literacy has a large marginal effect on household wealth accumulation from rural areas,high age group and low education level. In addition,empirical evidence from 2014 and 2015 CHFS quarterly survey data indicates that financial literacy also has a significant positive effect on wealth growth,which further confirms the positive and significant effect of financial literacy on household wealth accumulation.

 

Key words: Financial literacy; Wealth accumulation; Asset allocation

Financial Literacy,Wealth Accumulation and Household Asset Allocation Wu Yu.pdf