Financial Literacy And Family Financial Asset Allocation

According to our country national economy sustained and rapid development and the reform of the income distribution system,the disposable income of residents is increasing and the proportion of household financial assets in the social financial assets is growing, they are both playing amore and more important role in the development of the capital market and macroeconomic. In recent years, Chinese financial market and financial innovation have been developed rapidly.Stocks, securities, funds, other financial products and a variety of financial services have been continuously enriched. Consumers increasingly should have a certain level of financial literacy to make the right investment decisions.Financial literacy, refers to the consumer has the knowledge and skills of the financial resources for the effective management of the financial resources of its lifetime, is a new area of finance research in recent years. Financial literacy is not only the accumulation of financial knowledge, but also guide consumersto take financial practice and promoteconsumers to make the right financial decisions as well as realize the value of their property. Under this background, this paper attempts to study the following three questions: first, how the level of financial literacy of Chinese residents and the allocation of household financial assets? Second, how does financial literacy affect family financial asset allocation? Third, what are the factors that affect financial literacy? How do they affect?This paper systematically studys the financial literacy and household financial asset allocation by using theoretical analysis, comparative analysis, statistical analysis and econometric model research. Based on the theoretical analysis, this paper designs the specialized questionnaire to collect the micro data of financial literacy and the household financial assetallocationin Shanghai. Using the method of comparative analysis and statistical analysis, this paper analysis the status of financial literacy level and household financial asset allocation. Finally, in the empirical aspect, this paper analyses how financial literacy affect the family financial market participation and asset allocation. And further empirical analysis studys financial literacy influencingfactors and characteristics. Finally summarized and put forward the measures to improve the level of financial literacy, in order to promote family wealth accumulation and reasonable allocation of household financial assets.The main conclusions of this paper are: first, the financial literacy improves the family’s financial market participation rate and the proportion of risk assets; Second, although the financial literacy improves family’s stock marketparticipation rate, but it has no significant impact in the proportion of stock assets; Thrid, education, income, age and occupation aresignificant factorsin financial literacy.Futhermore, this paper found that the increases of household’s income, risk preference and higher education have great influence on household’s financial market participation and the risk asset holdings. Investment experience increases the proportion of the household’s stock holdings and the possibility of the stock marketprofits.Individual business and house will have a crowing out effect on household’s financial market participation and the risk asset holdings.