The Impact Of Residents’ Financial Capacity On Relative Poverty

China achieved comprehensive poverty alleviation under current standards and eliminated absolute poverty in 2020.However,the issue of poverty is complex and dynamic.Different poverty line settings lead to different poverty populations,which is directly related to the identification of the poor,the analysis of the causes of poverty,and the formulation of poverty alleviation policies.At the same time,differences in different regions affect poverty’s dynamic development.The cause of poverty governance in China has shifted to relative poverty.Alleviating the problem of relative poverty not only focuses on the income of the poor,but also focuses on cultivating the endogenous development ability of the poor.The alleviation effect of national policies and financial institutions’ support on relative poverty is influenced by the financial capacity within households,and shows differences in regional and household characteristics.Different financial levels make residents exhibit different financial awareness and behavior.If residents have a high level of financial ability,they can better understand and obtain bank loans,insurance services,and other financial services.At the same time,they can seize the income opportunities brought,make reasonable asset allocation,make reasonable financial decisions,and achieve the well-being of individuals and families.As a human capital,assessing the relationship between financial capacity and relative poverty,as well as its mechanisms,is important for preventing poverty return.Based on the data from the China Household Finance Survey,this paper constructs an index of residents’ financial capacity that includes multiple indicators of financial literacy and availability of financial services through factor analysis,uses the relative poverty line method of40% of the median household disposable income to measure relative poverty,and uses the Probit model to explore the impact of Chinese residents’ financial ability on relative poverty;Based on this,an intermediary effect model is used to analyze whether residential real estate and risk asset allocation play a mediating role.Finally,the heterogeneity of the impact of financial capacity on relative poverty under different household characteristics and regional locations is explored.The research findings are as follows: 1.Probit model regression shows that improving residents’ financial capacity can alleviate relative poverty;2.Residents’ financial capacity avoids falling into relative poverty by influencing risky assets and property allocation,and property has a greater impact on relative poverty;The inhibitory effect of financial capacity on relative poverty is more evident in urban areas than in rural areas,and more evident in eastern areas than in other regions.Among households with higher financial levels,under the age of 53,and low debt levels,the effect of financial capacity on alleviating relative poverty is more evident.In addition,the results of different measures of residents’ financial capacity and relative poverty are robust.In view of this,the inspiration of this article is to strengthen residents’ financial education,build an orderly financial market environment,increase the accuracy of the identification and support of relative poverty,and then fully exert the role of financial capacity in alleviating relative poverty.