Research on the impact and heterogeneity of housing on the allocation of financial assets of households: Evidence from China.

ABSTRACT

This paper investigates the impact of housing with both consumption and investment attributes on the risky financial asset allocation of households, constructs Probit and Tobit models using 2019 China Household Finance Survey (CHFS) data, and proceeds to the mediation effect test and heterogeneity analysis. Results indicate that owning only one house exhibits a crowding-out effect on the risky financial asset allocation of urban households, with the degree of risk preference as the mediating effect mechanism, while owning multiple houses exhibits an asset allocation effect. Housing borrowing other than bank loans inhibits urban households from making risky financial asset allocations. The effect of housing on risky financial asset allocation is heterogeneous by income, age, and region.