How Housing Affects Stock Investment—An SEM Analysis

Jiandong Li and Jianmei Zhao
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Jiandong Li: Chinese Academy of Finance and Development (CAFD), Central University of Finance and Economics (CUFE), Beijing 100081, China
Jianmei Zhao: China Academy of Public Finance and Public Policy (CAPFPP), Central University of Finance and Economics (CUFE), Beijing 100081, China

Economies, 2019, vol. 7, issue 1, 1-11

Abstract: The extant literature regarding the effects of housing on stock investment shows inconsistent findings, either positive or negative effects have been reported. This paper investigates the mechanisms by which housing affects household stock investment through a structure equation model (SEM). Applying the data from the China Household Finance Survey (CHFS), we confirm and quantify the magnitudes of contemporaneous “wealth effects” and “crowd-out effects” of housing on household equity investment. Overall, the combined effect of housing on stock investment is positive in the context of urban China.

Keywords: housing; stock investment; structural equation model; urban China (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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