Research On The Impact Of Financial Literacy And Income Level On Family Financial Market Participation

With the establishment of wealth management subsidiaries by major banks in 2019,the China Banking Regulatory Commission lowered some investment threshold restrictions on wealth management products,microfinance entities such as households and individuals will also add new vitality to China's capital market.However,under the background of various financial innovations in recent years,the overall financial market participation rate of urban and rural residents in China is only 11.1%.How to solve the contradiction between the urgent needs of urban and rural residents for asset appreciation and preservation and the overall low participation rate of residents 'financial markets has become a hot topic for studying residents' microfinance.This article starts from the theory of foreign related asset portfolios and uses the data of China Household Financial Survey(CHFS)2015 according to the actual situation in China.Analysis,combined with domestic and foreign related theoretical research and results,from a multi-angle and multi-dimensional study of the factors affecting the risk asset financial market participation rate,participation level,and stock market participation rate,participation level.Because the dependent variable of the study is whether the family participates in the risk financial market and the stock market,both of which are discrete data,the traditional linear model cannot give an effective explanation.According to the actual needs of this article,the binary probit model is used to analyze family risk finance Market participation and household stock market participation.The Probit model belongs to a nonlinear regression model.The size of the regression coefficient cannot explain its impact,and the positive and negative of the regression coefficient can only be interpreted as the increase or decrease in the probability of the dependent variable changing.When studying financial knowledge,income level,and the proportion of risk assets and stock assets of the explanatory variables,the explanatory variables are left-cut(review).According to the previous literature,this article uses the review regression model(TOBIT)to study household financial risk assets.Matching ratio and stock asset ratio.Using the Probit model of financial knowledge,income level and its interaction terms on financial market participation and stock market participation;using the Tobit model to explore the impact of financial knowledge,income level and its interaction terms on risk asset allocation and equity asset ratio,and finally To conclude: the higher the household income level,the greater the possibility of participating in the financial and stock markets,and the greater the probability of holding more risky assets;similarly,the higher the financial literacy,the greater the proportion of high financial assets And the possibility of stock asset ratio.When the income is constant,the increase in financial knowledge will significantly reduce China's household stock market participation,risk asset ratio and stock asset ratio.When financial knowledge is constant,an increase in income will significantly reduce China's household stock market participation,risk asset ratio and stock asset ratio.