EconPapers    
Economics at your fingertips  
 

Risk attitude, financial literacy and household consumption: Evidence from stock market crash in China

Yixing Zhang, Qinmin Jia and Chen Chen

Economic Modelling, 2021, vol. 94, issue C, 995-1006

Abstract: The most recent stock market crash occurred in 2015 and caused a huge negative impact on the household sector. This paper assesses the impact of stock market crash on households’ financial income and consumption. We find that the financial income of households holding risky assets decreased significantly, in the meanwhile, financial literacy and investment experience did not help reduce loses. In terms of consumption, households with different risk attitude and financial literacy have significant differences in whether they choose smoother consumption decisions after the shock. Finally, based on the empirical results, we estimate that the stock market crash caused the consumption of residents in 2016 to decrease by 87.53 billion RMB, accounting for 0.30% of the total resident consumption.

Keywords: Risk attitude; Financial literacy; Consumption; Stock market crash (search for similar items in EconPapers)
JEL-codes: D12 E44 H31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999319319984
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:94:y:2021:i:c:p:995-1006

DOI: 10.1016/j.econmod.2020.02.040

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-03-19
Handle: RePEc:eee:ecmode:v:94:y:2021:i:c:p:995-1006