Research On The Restriction Mechanism Of The Effective Demand Of Reverse Mortgage In China:Based On Bequest Motivation And Cognitive Ability

With the aging of the population,the weakening of family pension function and the increasing pension gap,how to find an effective way to alleviate the upcoming "pension pressure" has become a difficult problem for theoretical researchers and policy makers.International experience shows that the housing reverse mortgage can effectively integrate the comprehensive advantages of the real estate market and the financial market,and make the property owned by the elderly play the triple functions of residence,pension and investment,which is a beneficial supplement to the traditional old-age security method.Therefore,under the basic conditions of increasing aging,increasing "empty account" of pension,weakening of family pension function,and high proportion of housing ownership,carrying out housing reverse mortgage can transform social stock housing assets into pension resources,so as to solve the pension problem of "the rich in real estate and the poor in cash".Our government has continuously issued the relevant implementation policies of housing reverse mortgage,which shows the support of our government in implementing this model.Developing the housing reverse mortgage is conducive to the establishment of a "multi-level and multi-pillar" old-age security system,so as to cope with the aging of the population,optimize the allocation of social assets and improve the sustainability of the old-age security system.Although relevant theories have shown that the housing reverse mortgage model is a useful supplement to the old-age security system.Although relevant theories have shown that reverse mortgage is a beneficial supplement to the old-age security system.However,the development of this model is not satisfactory,the actual signing rate is low,and there is a serious "insufficient effective demand" situation.Looking at the practice in China in recent years,there are many macro factors that affect the effective implementation of housing reverse mortgage loans(for example,incomplete government support system,imperfect financial market and unstable real estate market).However,compared with the external market environment,the potential demand willingness of the elderly in China is the key to determine the effective operation of the housing reverse mortgage.According to the latest research at home and abroad,behavioral decision-making factors such as bequest motivation and cognitive ability are important constraints in the decisionmaking of asset allocation of retired households,which will significantly affect the marginal consumption tendency and asset allocation efficiency of retired residents.Participating in the housing reverse mortgage also belongs to the family asset allocation decision of retired residents.Then,are bequest motivation and cognitive ability the main behavioral constraints of the "effective demand" of housing reverse mortgage loans in China? What are its influencing mechanisms and channels? And whether there are effective mitigation strategies and optimization schemes? For the above series of problems,there is still a lack of systematic theoretical demonstration and empirical test.Under the background of the above analysis,this paper mainly makes relevant research from the following aspects:Firstly,this paper draws on the intertemporal utility decision-making model,deduces the demand decision-making rules for the elderly to participate in the reverse mortgage under the principle of maximizing the expected utility in the life cycle,and analyzes the changes of the life-long expected utility of the elderly to participate in the reverse mortgage by using the current population and economic data of China,and effectively identifies the constraint mechanism of bequest motivation and cognitive ability on the demand decision of the reverse mortgage in China.The findings are as follows:(1)Balancing marginal utility of consumption and marginal utility of bequest is the main decision-making rule for participating in reverse mortgage,and high bequest motivation is an important constraint mechanism for the effective demand of reverse mortgage in China.The housing reverse mortgage embedded with redemption option can realize the option of retaining part of the heritage value,and to a certain extent,it can alleviate the constraint effect of bequest motivation on the demand will of the elderly,so it is more suitable for retired residents with strong bequest motivation in China.(2)As an innovative financial product for the aged,the housing reverse mortgage has the characteristics of format,specialization and complexity.However,the lack of financial cognitive ability of the elderly residents in China will lead to their cognitive deviation of the operating principle of the housing reverse mortgage,which further limits the effective demand of the housing reverse mortgage market in China.(3)Through the sensitivity analysis of the main parameters,it is found that the pricing interest rate,the initial cost,the degree of risk aversion,the pension income and other relevant decision-making factors will also constrain the effective demand of the housing reverse mortgage market to some extent.Secondly,bequest motivation is an important constraint factor that affects family consumption-savings decision-making,and participation in the housing reverse mortgage will also indirectly affect the family asset allocation decision-making of the elderly.However,at present,the empirical research on the effective demand of housing reverse mortgage at home and abroad neglects to empirically explore the constraint effect of bequest motivation.Therefore,based on the theoretical construction of the influence mechanism of bequest motivation caused by egoism and altruism,this paper uses the survey data of pilot cities of reverse mortgage in China(Beijing and Shanghai),and makes an empirical analysis of the constraint effect of egoism and altruism bequest motivation of the elderly on the demand willingness of reverse mortgage by using the Ordered-Probit econometric model.The findings are as follows:(1)Under the condition of controlling the characteristics of the elderly population,the elderly’s willingness to participate in reverse mortgage will be influenced by the double constraints of "egoistic bequest motivation" and "altruistic bequest motivation".(2)Improving "satisfaction degree of community aged care service" can weaken the restraining influence of "egoistic bequest motivation",thus enhancing the demand willingness of the elderly to participate in reverse mortgage;The effective implementation of the real estate tax can weaken the constraint effect of "altruistic bequest motivation" and enhance the demand willingness of the elderly to participate in reverse mortgage.(3)In order to increase the effective demand for housing reverse mortgage,financial institutions should constantly innovate and optimize the operation mode of housing reverse mortgage,and deal with the constraint effect of egoistic and altruistic bequest motives.While the government departments should constantly promote the reform of tax system,improve the quality and specialization of community aged care services,thus indirectly promoting the elderly’s willingness to participate in housing reverse mortgage.Thirdly,due to the professionalism and complexity of housing reverse mortgage,and the unscientific product design and promotion scheme of financial institutions in China,retired residents with insufficient financial literacy lack sufficient cognitive ability on the basic characteristics of housing reverse mortgage,which further affects their rational demand decisions.Therefore,the lack of financial cognitive ability of the elderly residents in China may be a new explanation of the phenomenon of "insufficient effective demand" in the reverse mortgage market in China.Based on this,this paper uses the experimental data of Zhengzhou,a city where housing reverse mortgage loans are promoted in China,effectively measures the cognitive ability and willingness to participate in housing reverse mortgage of the elderly urban residents in China,and empirically investigates the mechanism of the influence of cognitive ability on the demand willingness of housing reverse mortgage loans.The results show that:(1)The higher the cognitive ability of the elderly residents to housing reverse mortgage loans,the stronger their demand will be;On the contrary,if the cognitive ability of housing reverse mortgage loan is insufficient,it will significantly limit the demand willingness of housing reverse mortgage.(2)Legacy motivation and risk preference are two important intermediary mechanisms of cognitive ability’s influence on the demand willingness of housing reverse mortgage.(3)The financial education investment and social interaction ability of the elderly residents have a significant positive moderating effect on the relationship between cognitive ability and the demand willingness of housing reverse mortgage.Fourthly,in order to explore whether there is an effective optimization scheme that can alleviate the constraint of bequest motivation and cognitive ability on the demand will of reverse mortgage in China? In this paper,a comparative experiment of information notification of housing reverse mortgage is further innovatively designed,that is,by designing a highly understandable promotion scheme,the objective information such as the basic characteristics,operating principles,value functions and so on of housing reverse mortgage is clearly displayed,and then the demand-willingness conversion probability of housing reverse mortgage loan is experimentally studied.The empirical results show that:(1)Up to 46.78% of the subjects’ demand-willingness of housing reverse mortgage changed from the initial "unwillingness" to "willingness" after the information informing experiment,which indicated that the "cognitive bias" of the operating mechanism of housing reverse mortgage was an important cause of the "insufficient effective demand" in the housing reverse mortgage market,and the information informing experiment could correct the "cognitive bias" to some extent.(2)After the information informing experiment,the subjects with "high bequest motivation" changed their desire for housing reverse mortgage more significantly.This shows that the promotion scheme with high intelligibility can enhance our residents’ objective judgment on the "heritage protection function" of housing reverse mortgage,thus effectively alleviating the constraint of bequest motivation on the demand-willingness of housing reverse mortgage.(3)After the information informing experiment,the subjects with "low cognitive ability" also significantly changed their desire for housing reverse mortgage.This shows that the value information with a high degree of understanding is helpful to identify the operating principle of housing reverse mortgage,thus alleviating the constraint of cognitive ability on the demandwillingness of housing reverse mortgage.Finally,combined with the main research conclusions of this paper,this paper explores the optimization strategy for the effective operation of housing reverse mortgage in China from the perspectives of financial institutions(product design,publicity strategy,trust mechanism)and government departments(consultation platform,tax policy,community service).