An Empirical Study On The Effect Of Income Structure On Household Financial Risk Assets Allocation

In recent years,under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core,people’s living standards have been continuously improved and people’s income has continued to grow.In addition to meeting the daily living expenses,it indirectly increases the residents’ demand for venture market investment.With the development of society,residents’ investment needs are no longer limited to risk-free financial assets,but gradually turn to choose to allocate financial risk assets.It is of great significance for Chinese residents to investigate the disposition of risk assets to understand the ability and level of Chinese residents participating in the financial market.The reasonable and effective allocation of risk assets is conducive to the growth of residents’ wealth,the optimization of income structure,and the stability of the national economy.Based on the data of household income structure in China Statistical Yearbook from2015 to 2019,this paper compares the income structure of Chinese residents by regions and towns.The present situation showed that the income structure of Chinese households was optimized continuously through policies,but it still took wage income mainly at present.There is still a certain gap between the allocation of urban and rural financial activities.In the entire category of risky financial assets,total investment by Chinese households in financial products is much higher than that of other risky financial assets,followed by shares,funds and bonds.Then,using the data of China Household Finance Survey in 2019,this paper uses Probit,Tobit and Poisson models respectively to investigate the effect of income structure on the allocation of household financial risk assets,its use,proportion and the amount of risk assets held by households.Secondly,the samples were divided into regions for heterogeneity test,and the CHFS data in 2015 and 2017 were processed,and the data of three years were compared to test whether the empirical results were robust.The analysis results show that the increase of household wage income and business income will promote the possibility of household participating in the financial market and increase the proportion of financial risk assets and the amount of risk assets.In the samples of 2017 and 2015,except for the insignificant impact of operational income on the proportion of household risk assets in 2015,other income variables in 2015 and all income variables in 2017 are significant to varying degrees,and the positive and negative of variables in these two years are basically consistent with the analysis results of 2019.In this paper,the main conclusions are as follows: Household income of Chinese residents is mainly based on wage income.The financial assets of households in eastern urban areas are much higher than those in other areas,and the amount of risky assets and investment amount they choose are also much higher than those in other areas.Empirical studies indicate that wage income,without revenues,transfers of financial income to households of risky assets with positive effects and configurations are significant,to each household whether holding financial risk assets leads to insignificant income,both because of its influence on the share of risky assets and on the investment of risky assets.In order to overcome the endogenous problem of the model,rent income is selected as the instrumental variable for correlation test.Finally,relevant suggestions are put forward to the government,financial institutions,households and investors.