Research On Financial Assets Selection Of Rural Families And Its Impact On Consumption

The family wealth can be improved and consumer demand of family members may also be guided and satisfied,if a family who has demand for family portfolio makes a reasonable selection of financial assets.Furthermore,it is conducive to result in the implementation of family utility maximization in long run and promote the healthy development of the national economy.According to Chinese Household Finance Survey data,China's domestic financial market is still underdevelopment.The family's participation rate of financial market is very low and the difference between urban and rural areas is relatively large.The financial asset structure of China's rural household is single with great proportion of savings deposits.The participation rate of formal risk financial market is very low.The participation rate in the stock market was only 1.9%,far below the city level.The risk financial asset of rural families is mainly private lending.Therefore,to optimize behaviors of financial asset selection and improve the level of consumption and welfare of the rural households,there is an urgent need to strengthen the support of rural finance.It will be helpful to promote the optimization of financial resources and the accumulation of assets of rural familiesFrom the perspective of national policies,since 2004,the No.1 Central Document had concerned about the development of rural financial services for thirteen consecutive years,making a series of major arrangements of rural finance,which provided powerful financial support for production and living of households in rural areas.On the other hand,the current rural finance is still the relatively weak part in China's financial system.Rural financial services are still unavailable in many places.There are many contradictions and challenges for the increasing diversification of rural financial demand.This will be of important value of reference and making decision on the problems about rural finance and rural family finance.Only adapt to the financial demand of rural families who are the subjects of financial services in rural areas,and taking multi-level and diversification as the goal to provide convenient modern financial services,rural financial reform will be deepened more effectively and impel the financial institutions to serve for the "three rural issues".Based on the above analysis,this paper focuses on the following three issues.Under the situation of limited supply of the formal financial assets in rural areas,how to make a reasonable theoretical explanation on risk-free savings assets preference of rural families?Why do rational rural families choose non-formal risk financial assets with difficulty to achieve the property income and uncertainty of the return period?In what circumstances rural families provide private lending?What is the impact on the rural formal credit market?Through what kind of mechanisms and ways do the different financial assets of rural families affect consumption?And whether there are differences on influence on non-durable goods and durable goods consumption of the rural families?In contrast,the main research contents and conclusions are as follows.Part one:analysis of financial asset selection behavior characteristics of rural families Taking rural families who have demands for financial assets as the research objects,this paper analyzes the general situation of financial asset of China's rural families,mainly including the configuration structure,configuration channels,the degree of risk and participation scale.The above specific description lays the foundation for the analysis of financial assets decision behavior of rural families.The results show that,overall,the proportion of the average financial assets of rural households to total assets is relatively low,and the distribution between rural families is not uniform.The regional gap of financial assets of the rural families is remarkable,showing a decreasing trend from the east to the west.From the perspective of financial asset structure and scale,financial assets of China's rural families mainly consist of cash,savings deposits and private lending.In terms of the distribution channels,the total amount of formal financial assets of rural families is far greater than the non-formal financial assets,but mainly in the low and middle level.Non-formal financial behavior is mainly involved in private credit market.The probability of participation of rural families in stocks and bonds,funds and other formal financial assets is in very low level.From the point of view of the degree of risk,the total amount of risk-free financial assets of rural families is far greater than that of risk financial assets,especially participate probability and degree of the risk financial assets provided by the formal financial institutions are very low.Part two:theoretical analysis and empirical test on the risk-free financial assets selection of rural familiesOn the basis of the rural family economic theory,this dissertation will construct function model of rural household risk-free financial asset selection and family utility,and analyze phenomenon of single risk-free financial asset selection of rural families.Furthermore,an econometric model is to be built,testing the main factors affecting risk-free financial asset selection behavior of rural families.The results show that rural families can only hold their financial assets in the form of risk-free deposits and cash,due to limited supply of the existing rural formal credit market and formal financial asset allocation channels,and limited conditions such as the relatively low level of income,weak risk bearing capacity,lack of awareness of risk investment and financial knowledge,etc Whether it is involved in configuration or use risk-free financial assets,is a rational choice of rural families,considering both internal resources constraint and external constraint.The goal of behavior decision-making is to maximize long-term utility of the family.Rural families with higher level of income and wealth,more risk aversion,the higher the savings willing tend to prefer the risk-free financial assets.Credit constraint makes rural families with the financial assets accumulation tend to reduce the risk-free financial asset,in order to make up for the funds required by domestic production and operation and smooth consumption.In addition,the availability of financial services is to increase the convenience of financial asset selection.Part three:the theoretical analysis and empirical test on the risk financial assets selection of rural familiesRegarding economic rationality of the rural family as the basic premise,this dissertation is to construct the mathematical model of risk financial assets selection and discuss influence mechanism of the family's social network on risk financial assets selection of rural households theoretically.Then,the econometric model for empirical test is to be built to analyze the main factors affecting participation rate and degree of the private lending of rural families,by quantifying the characteristics of social network of the rural family.The results show that,the link function of social network can play a role of information screening,which helps to reduce the information asymmetry between money lending families and borrowing families,and has significant influences on the risk preference of lending decision maker.Lending funds families show weaker regulatory uncertainty avoidance.Therefore,the private lending is to be the optimal choice of risk financial assets of rural families under given constraints.At the same time,the private lending increases the internal credit supply within the social network,easing liquidity constraints and credit constraints faced by borrowing familiesPart four:the theoretical analysis and empirical test on the impact of financial assets choice behavior of rural families on consumptionOn the basis of the life cycle hypothesis and permanent income hypothesis(LCH-PIH)and the intertemporal consumption decision model,this dissertation is to construct general equilibrium model of intertemporal selection of financial assets and consumption decisions under additional constraints,and to explain influence mechanism of financial assets choice of rural families on consume theoretically,integrated rural family economic theory and household financial asset portfolio theory.Furthermore,a multivariate regression model is to be built,empirically analyzing the influence degree and direction of rural household financial asset selection on total consumption,durables and non-durables goods consumption,and further comparing the difference.The results show that,after the rural families having demand allocate their financial assets,total amount of financial assets of rural families has an important effect on consumption growth,and influence of financial assets on non-durable goods consumption growth will be greater than that of the growth of durable goods consumption.The effect of risk-free financial assets on growth of rural household's consumption is greater than that of the private lending.Among of risk-free financial assets,the effects of cash on growth of the total consumption and non-durable goods consumption are greater than those of savings deposits,and the growth effect of savings deposits on durables goods consumption is more prominent than that of cash.The interest income of savings deposits has an important role in the growth of durable goods consumption of the rural family,and a certain negative effect on the growth of total consumption and non-durable goods consumption,but this effect is not significant.The influence of cash gift income on the growth of both total consumption and non-durable goods consumption will be greater than that of the durable goods consumption,and the influence on durables consumption is not significant.