Housing Investment Stock Market Participation and Household Portfolio choice Evidence from Chinas Urban Areas

Document pages: 26 pages

Abstract: This paper employs the survey data of CHFS (2013) to investigate the impactof housing investment on household stock market participation and portfoliochoice. The results show that larger housing investment encourages thehousehold participation in the stock market, but reduces the proportion oftheir stockholding. The above conclusion remains true even when the endogeneityproblem is controlled with risk attitude classification, Heckman model test andsubsample regression. This study shows that the growth in the housing marketwill not lead to stock market development because of lack of householdfinancial literacy and the low expected yield on stock market.