Financial literacy, household portfolio choice and investment return

Jianjun Li, Qize Li and Xu Wei

Pacific-Basin Finance Journal, 2020, vol. 62, issue C

Abstract: Based on data from the 2014 China Family Panel Studies (CFPS), this paper investigates the effects of financial literacy on Chinese households' portfolio choices and investment returns from the financial market. We find that financial literacy significantly increases households' investments in risky assets. Financial literacy may have an impact by increasing capacities to understand and compare financial assets. However, we further find that it is not necessary for all investors to have financial knowledge to gain higher investment returns from financial markets. Our results show that financial literacy increases investment returns for younger and better educated households while reducing the returns for older, less educated households.

Keywords: Financial literacy; Financial market participation; Household portfolio choices; Investment return (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X20301128
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:pacfin:v:62:y:2020:i:c:s0927538x20301128

DOI: 10.1016/j.pacfin.2020.101370

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().