The Effect of Housing Wealth on Household Portfolio Choice

Qize Li (), Dirk Brounen Brounen (), Jianjun Li () and Xu Wei ()
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Qize Li: Chinese Academy of Social Sciences
Dirk Brounen Brounen: TIAS School for Business and Society, Tilburg University
Jianjun Li: School of Finance, Central University of Finance and Economics
Xu Wei: School of Finance, Central University of Finance and Economics

Annals of Economics and Finance, 2022, vol. 23, issue 2, 253-277

Abstract: This study uses data from the 2013 China Household Finance Survey (CHFS) to investigate the effect of housing tenure decisions on households' portfolio choices. We find that property value has a significantly positive impact on the extent to which households hold risky financial assets. Furthermore, this impact is mitigated in households that do not have full property rights over their homes, and housing characteristics that increase transaction costs reduce the proportion of households with risky financial asset holdings. These results indicate the presence of a wealth effect on households' portfolio choices.

Keywords: Housing portfolio choices; Housing wealth effect; Financial market participation (search for similar items in EconPapers)
JEL-codes: G50 G51 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2022:v:23:i:2:li:brounen:li:wei

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