A Study On The Impact Of Household Property And Financial Assets On Consumption

This paper argues that the study of consumption should return to the starting point of modern economics which is Adam Smith’s "An Inquiry into the Nature and Causes of the Wealth of Nations". Adam Smith found assets have effects on consumption, and this finding also opened a research on the relationship between asset and consumption. At the beginning of this century, China’s household property and financial assets scale is continually expanding and the development of the financial market and real estate market continues to be improved. The support of national policies to promote the holding proportion of residents’financial assets and real estate is conducive to play the role of financial assets and housing assets on consumption. Exploring assets having effect on consumption under such background can bring a lot of inspiration to us.Based on this, this paper first reviews academic research, the modern economic theory and the behavioral financial theory. And this paper discusses the transmission mechanism of consumption. Secondly, this paper adopts 2012 CHARLS survey data and calculates the effect of net assets upon consumption. The conclusion is:the middle-income family’s assets have greater effect on consumption, of which the family property and financial assets, the annual per capita income of 0.5-3 million increase in stimulating effect on consumption in these families, the value of real estate and finance asset value of each increase of 100 Yuan, the consumption will increase by 9.55 Yuan and 8.46 Yuan. The pulling effect of family property value for consumer to consumer driven than financial assets, the elastic property on the value of consumption between 0.04-0.05 and real estate 100 Yuan will bring consumption increased to 4-5 Yuan, and the financial assets the value of the elasticity of consumption in the 0.02 wave, namely the financial assets increased by 100 Yuan will bring consumption growth of 2 Yuan; the effect of mortgage asset value also has effect on consumption, but the effect on consumption is not the financial loan. From the overall trend of the age structure of the family, old family assets change on consumption is lower than that of young families, in particular, with the changing age structure change of family, property and financial assets the value of the impact on consumption continues to weaken, the property value as an example, the age of 45-50 years old.1% families, increasing the value of the property will bring consumption growth of 4%, while at the same time over the age of 70 families headed by increasing the value of the property in 1% will only lead to consumption growth of 1%; it is worth noting that, due to the substitution effect, the young family financial asset has a weak crowding out effect. Income, family income growth effect on consumption than that of young families, the elderly family income growth of 1% will bring consumption increased by 6% and the young family income growth of 1% to bring spending growth of 5%. According to the conclusion, macro suggestions is put forward in this paper:to promote the sustained and healthy development of the real estate market, accelerate the financial market reform, the age structure of the population of concern to residents’ consumption, accelerate the reform of income distribution system.