The Impact Of Social Interaction On Household Risky Financial Asset Allocatio

As China’s economy continues to improve,the per capita disposable income of urban and rural households continues to increase,and the demand for wealth preservation and appreciation by households is increasing.However,there is still a phenomenon of "limited participation" in China’s risk financial market,and more and more scholars are examining irrational behavior in family investment from the perspective of social interaction.This article uses the latest data from the China Household Finance Survey to explore the impact of social interaction on the willingness and depth of Chinese households to allocate risky financial assets.This study has important impact on increasing household income and narrowing the gap between urban and rural households,and can inject significant vitality into China’s financial market and promote stable and high-quality development of China’s economy.Firstly,this paper analyzes the mechanism of social interaction and household risky financial asset allocation,and proposes relevant hypotheses;Secondly,using the latest three years of CHFS survey data,select variables,establish Logit and Tobit models,and conduct benchmark regression analysis;Thirdly,based on the differences between urban and rural perspectives,this article explores the differences in the impact of social interaction on household risky financial asset allocation from three aspects: income,age,and education level;In addition,this study verifies the robustness of the regression results of this study through the method of dividing samples,replacing models,replacing explained variables,and propensity score matching,and introduces instrumental variables to solve possible endogenous problems in the benchmark regression model.Finally,this article conducts a mechanism analysis to clarify the mechanism of the impact of social interaction on the allocation of household risky financial assets.The main conclusions of this article are as follows:(1)Social interaction will significantly increase the willingness and depth of participation of urban and rural households in the allocation of risky financial assets,and there are differences in the promotion role of social interaction between urban and rural areas.Social interaction has a greater impact on the willingness and depth of participation of urban households in the allocation of risky financial assets.(2)The promotion of social interaction on the allocation of risky financial assets in households occurs through financial literacy and risk aversion.Social interaction can significantly improve family financial literacy and reduce family risk aversion,thereby promoting the willingness and depth of family risk financial asset allocation.(3)The impact of social interaction on the allocation of risky financial assets in households is heterogeneous among groups with different incomes,ages,and educational levels.Social interaction has a stronger impact on the depth of participation of urban and rural high-income households in the allocation of risky financial assets;It has a stronger impact on the willingness and depth of participation of urban and rural elderly families;It has a stronger role in promoting the participation of low-income families in risk financial markets in both urban and rural areas.