A Study On The Impact Of Financial Literacy On The Financial Asset Structure Of Chongqing Urban Households

Since the Chinese implementation of reform and opening up in 1978,the national economy has grown rapidly and people’s living standards have continued to improve.In2020,the scale of household investment has increased by more than 1,000 times compared with the initial stage of reform and opening up.The per capita disposable income of Chinese residents for the whole year is 35,128 yuan,a year-on-year increase of 9.1% in2021,according to the NBS.Households have more funds to invest in financial assets,enriching the way households invest.At the same time,changes in the general social background such as the introduction of new financial institutions,currency depreciation pressure brought about by inflation,and prolongation of life expectancy have led to the diversification of household financial asset allocation.Financial literacy is an effective human capital for investors to manage their own wealth,and plays an important role in the formulation and implementation of family financial investment decisions.Chongqing is one of the four municipalities directly under the Central Government in our country.It has developed rapidly over the years and is full of vigor.In the past ten years,Chongqing’s GDP has more than doubled.In 2021,the per capita disposable income of urban residents in Chongqing will reach 43,502 yuan,a year-on-year increase of 8.7%.Combining with the new social situation,this paper studies the structure of household financial assets,and from the perspective of financial literacy,it studies the impact of residents’ financial literacy on the structure of urban household financial assets in Chongqing.Firstly,it introduces the background of the topic selection,and summarizes the possible improvements based on the current research status of household finance and financial literacy at home and abroad.Secondly,it defines the meaning of financial literacy,subjective and objective financial literacy,self-confidence bias,and household financial assets.Further,the paper expounds the relevant theoretical basis,such as behavioral finance,life cycle hypothesis,liquidity preference theory and investment portfolio theory.Then,the design,distribution,recovery and data sorting process of the questionnaire are expounded,and the current subjective and objective opinions of urban residents in Chongqing are analyzed.The financial literacy level and the current situation of household financial asset structure are statistically analyzed;fourthly,the cumulative scoring method is used to construct the financial literacy score of the main explanatory variable of this paper,and the subjective and objective financial literacy and its control variables are studied on the proportion of household securities assets and wealth management products.ratio,the proportion of commercial insurance and the proportion of monetary funds.Finally,according to the empirical results,effective suggestions are put forward from the perspectives of society,financial institutions and household investors.The main conclusions of this paper are:(1)The higher the objective financial literacy level and the subjective financial literacy level of urban residents in Chongqing,the higher the proportion of the family’s investment in securities assets.The influence of age on the proportion of household securities assets is in an inverted "U" shape.Education,family income,risk preference,and stock age will significantly and positively affect the proportion of households’ investment in securities assets.Family ownership of commercial housing will reduce the family’s investment in securities assets.The proportion of investment in the market.(2)The higher the objective financial literacy level and subjective financial literacy level of residents,the higher the proportion of the household’s investment in wealth management products.The impact of age on the proportion of family wealth management products has a hump effect.Education,family income,and risk preference have a positive effect on the proportion of family wealth management products.Family ownership of commercial housing will reduce the proportion of family investment in wealth management products.(3)The higher the objective financial literacy level and subjective financial literacy level of residents,the higher the proportion of household investment in commercial insurance.Age,family income and the proportion of household commercial insurance investment are positively correlated.Educational background,risk preference and the proportion of household commercial insurance investment have no correlation.Family ownership of commercial housing will reduce the proportion of household investment in commercial insurance.(4)The higher the subjective and objective financial literacy level of residents,the lower the proportion of monetary funds held by households.Age has an inverted "U"-shaped impact on the proportion of household monetary funds;when residents’ educational background,family income,and risk-loving degree increase,the proportion of household monetary funds will decrease.Household ownership of commercial housing increases the proportion of households holding monetary funds.Financial literacy has an important impact on the structure of household financial assets.In order to promote residents to improve their financial literacy level and optimize the structure of household financial assets,this paper puts forward relevant suggestions from the following three perspectives:(1)From a social perspective: the government can set up special The financial knowledge popularization group of the government will popularize knowledge by community and sub-district,establish a financial museum in the local area,increase the publicity of the museum,and encourage citizens to visit;through the reform of the distribution system,the income level of the family will be improved,and the income level will be gradually reduced.A new pattern of distribution of gaps.(2)From the perspective of financial institutions: institutions should fully consider the psychology of the public,and focus on launching stable financial products;major financial institutions can add financial knowledge popularization classes in their apps to help investors improve their financial literacy at the same time.It can also bring you potential clients.(3)From a family perspective: Investors should develop an interest in finance,pay attention to financial news,understand economic trends,enrich financial knowledge,and improve financial literacy.Investors should comprehensively consider the actual situation of the family and reasonably allocate family resources to different financial assets.It should not be limited to the investment of monetary funds,but should constantly explore investment and financial management methods suitable for families to achieve family investment goals.