Risk sharing, siblings, and household equity investment: evidence from urban China

Xiaoyu Wu () and Jianmei Zhao ()
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Xiaoyu Wu: Central University of Finance and Economics
Jianmei Zhao: Central University of Finance and Economics

Journal of Population Economics, 2020, vol. 33, issue 2, No 4, 482 pages

Abstract: Abstract In a society where financial market and insurance market are under-developed, social networks play an important role in risk sharing. Using data from the 2011 China Household Finance Survey, this paper examines the effect of siblings, which form strong ties in a social network, on household equity investment. We find that having one more sibling increases the probability of participation in stock market by 15–17% points and increases the fraction of total assets in stock investment by 2–3% points. We also find that sisters have a larger effect on equity investment than brothers. With the examination of the effects of siblings on social interaction, risk tolerance, saving, and borrowing behaviors, we argue that the main channel through which siblings affect household investment is risk sharing.

Keywords: Household equity investment; Risk sharing; One-child policy; Social network; China (search for similar items in EconPapers)
JEL-codes: G11 J13 O10 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s00148-019-00740-x

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