Research On The Impact Of Financial Literacy On Household Financial Asset Allocation

After the reform and opening up,the in-depth opening of the capital market has been promoted in an orderly manner,China’s economy has developed rapidly,and financial innovation has continued.With the growth of household income,the accumulation of household wealth increases the demand for financial management.In this context,in order to maintain and increase wealth,the effective allocation of family financial assets has become a hot topic.Correspondingly,there is a mismatch between financial literacy and needs.Therefore,it is particularly necessary to study the impact of financial literacy on household financial asset allocation,which will not only supplement the existing family finance theories,but also provide specific suggestions through empirical studies and play a positive role in both theoretical and practical aspects.First of all,in this paper,the domestic and foreign scholars on financial literacy,family financial asset allocation research status review,organize the literature research,introducing the theory of human capital,capital combination theory,life cycle theory,put forward the financial literacy through risk attitude family financial asset allocation of the transmission mechanism,using the 2017 Chinese families financial investigation(CHFS)data,Probit model was used to measure the effect of financial literacy on financial market participation rate in household decision-making process.When investigating the depth of participation of Chinese households in the risky financial market,due to the discontinuity of the proportion data,the Tobit model is selected and the mediation effect test is adopted to explore how financial literacy plays a role in the selection and allocation of household financial assets.It is found that financial literacy can promote the probability of householders’ participation in financial market in asset allocation,and enable householders to hold more risky financial assets when making financial decisions.Mechanism for inspection,found that financial literacy by changing the residents’ attitude to risk,to some extent,the improvement of financial literacy can increase the risk of family appetite,so as to promote the rational allocation of risks family financial assets,so as to realize the maintenance and appreciation of the wealth effect,further improve the family to participate in the depth of the financial markets.According to the research conclusions,this paper puts forward countermeasures and suggestions from the level of government departments,financial institutions and rural families.It is suggested that the government should improve the financial education system and strengthen the protection of investors’ rights and interests.For financial institutions,it is suggested to actively develop digital inclusive finance and focus on improving service quality and efficiency.Suggestions to families: strive to improve personal financial literacy,focus on improving risk prevention awareness,pay attention to the transmission of financial literacy education.