Research On The Influence Of Financial Literacy On Household Debt

Household debt is one of the most important research directions in household finance.Household debt is obviously different under the influence of family heterogeneity.Financial literacy level,as a key factor affecting family financial decisions,has an important impact on individual residents,families and even the stability of the financial market.The research on the influence of financial literacy on household debt is helpful to understand and grasp the financial literacy level and credit behavior of Chinese residents.At the same time,we should improve understanding of financial literacy education,promote the stable development of the financial market.This paper uses the survey data of China household financial survey(CHFS)in 2013 as the sample,and it uses Tobit and Probit models to study the influence of financial literacy on the family leverage ratio and the excessive debt of the family,and deeply analyzes the action path of financial literacy on the family leverage ratio,and uses instrumental variable method to solve the endogenous problem..Conclusion: the financial literacy level of Chinese residents is generally low,and the financial literacy of residents will have a positive impact on the household leverage ratio from the aspects of credit constraint,financial market participation,household consumption,risk preference and household income,but at the same time,financial literacy reduces the possibility of excessive debt.In addition,there is a significant positive correlation between financial literacy and operating liabilities,consumption liabilities.,durable goods debt and credit card debt.Finally,we propose that on the one hand we must strengthen the education on financial literacy,on the other hand,we should moderately lower the service threshold of financial institutions service and increase the credit support for household sectors,especially the credit constraints on rural households.