Research on Household Asset Investment Structure

Abstract

The actual behavior of the family is the choice of the family based on its own preference under the constraints. The family needs to smooth consumption through the intertemporal allocation of assets to maximize the long-term utility of the family. However, whether households can realize the effective allocation of assets largely depends on whether households can borrow from themselves. According to Guiso et (1996) and Koo (1998), credit constraints are an important factor to reduce the demand for risky assets. According to the data of China Household Finance Survey, 22% of families are directly constrained by credit from financial institutions. The participation rate of such families in stock market is 4.70% lower than that of other families, and the proportion of risk capital is 2.15% lower than that of other families. This result reflects that credit constrained households may have different characteristics in asset allocation, which is worthy of in-depth research and exploration. This paper will study the influence of social network and credit constraint on family asset choice.