A Study On The Financial Literacy And Risk Attitude's Influence On Household Financial Portfolio

In the international community,the knowledge about family finance has always been paid attention to by scholars,and the investment behavior of family has attracted more and more scholars to come to study.The main field of finance research has been added to the direction of family finance in addition to asset pricing and corporate finance.Along with the continuous development of the economy and the change of subject of income distribution,financial product has become increasingly flexible and diversified,which invigorates the financial market.At the same time,personal income,which takes the family as its basic unit is gradually improving.So there are more disposable capital and more kind of ways of combination of Financial Assets.Recently,experts lay more and more attention on household portfolio choices from different perspectives.Through literature review,we found that domestic studies on household portfolio choices mainly focus on how characteristics,household income and net asset affect household portfolio choices.Domestic financial literacy study is just beginning and most of the study is carried out a descriptive statistical analysis on Residential financial literacy.Based on literature at home and abroad,this thesis takes financial literacy and households portfolio choices as major research objects and to prove that financial literacy give households better theoretical and practical experiences,which improve households portfolio revenue.Secondly,this thesis takes risk attitude as the second variable to discover the difference of how the different risk attitude influenceshousehold portfolio choices.Based on the above study,we take the cross term of financial literacy and risk attitude as the third variable to measure the cross-impact of financial literacy on the allocation of risky asset and risk attitude.The thesis takes the data of 2013 National microcosmic survey form China Household Finance Survey.Firstly,we carried out an empirical research to study what influences financial literacy on the basis of traditional influential factors.The thesis uses Principal Component Analysis and Score Summation to find financial literacy indicators.Secondly,this thesis divides risk attitude into three categories: risk preference,risk aversion and risk Indifference based on their answers about risk control questions,and we further analysis different risk attitude category's participation in financial market.With the help of Probit?Tobit model,we mainly focuses on how financial literacy,risk attitude and their cross term influences household participation in financial market and household financial portfolio,we also have a robustness analysis at the end of the empirical research.The result shows that there is a positive relation between individual financial literacy and household participation in financial market and household financial portfolio.Risk preference also has a positive influence on household risk assets.Finally,based on the empirical results,this paper proposes related measures from three perspectives: the impact of individual factors on the participation of financial markets in the perspective of individual households,the study of the choice of financial market portfolio,and the design and development of financial institutions' products.Impact,from the government's point of view,considers the perfection of financial markets.