Financial Literacy Research on The Mechanism of Action of Residents' Property Income and Path

Abstract

Property income, as a kind of derived wealth, may produce the Matthew effect of "the poor getting poorer and the rich getting richer", which in turn leads to further widening of the wealth gap and more serious income disparity among residents. Based on the 2014 data of the China Household Tracking Survey (CFPS), we analyze the relationship between financial literacy and residents' property income using Tobit model, Probit model, Poisson regression and Sobel test. This paper finds that financial literacy has an enhancing effect on residents' property income. Mechanism and path analysis found that risk attitude and financial planning play a mediating effect in the process of financial literacy affecting residents' property income.