Impact Of Stock Market Volatility on Household Financial Assets

Abstract

At present, the scale of financial assets of urban and rural households in China is expanding, but there are big differences in type and structure. The securities market plays an important role as an important platform for financial asset allocation. Based on data from the China Household Finance Survey (CHFS) and the China Family Tracking Survey (CFPS), this paper analyzes the differences in household financial assets between urban and rural residents in China from 2016 to 2020 (the current data open to the public is only updated to 2020) using the TVP-VAR model. The results of the model show that the financial assets of rural residents' households are heterogeneously affected by different levels of the stock market, and the responses of high- and low-risk financial assets to them are also heterogeneous.