Study On The Wealth Accumulation Effect Of The Household Assets In Urban China

The wealth accumulation of household assets plays an important role in the growth anddistribution of the nation’s wealth. This paper applies the structural analysis, theoretical andempirical study methods into the study on the wealth growth and redistribution in urbanChina.Firstly, this paper analyzes the structure of Chinese urban household assets of2007and2012. Among all the financial assets, Real estates have the largest scale and increases fastest.Savings, as the financial asset with the largest share, increase faster either than stocks or funds.Secondly, this paper compares China with developed countries and finds out that wealthgrowth effect of household assets in China is much lower. As for each asset, real estate has thehighest wealth growth effect, according to no matter the absolute or the relative quantity. Stockhas a higher wealth growth effect than saving, although the quantity contribution of the latteris much larger.Thirdly, this paper applies the multiplier theory into building a property income multipliermodel. The regress outcome shows that the property income multiplier of urban householdswith highest income is4.7percent larger than that of households with middle income and5.3percent larger than that of households with lower income. The distribution effect of householdassets promotes the polarization of wealth. Especially it helps the wealth flow to thehouseholds with highest income.Finally, on the basis of the study above, this paper gives some policy proposals on how toincrease the wealth accumulation effect of household financial assets and decrease thepolarization between the rich and the poor.