Abstract
In the context of rapidly aging populations, Housing Reverse Mortgages (HRMs) offer a valuable supplement to the multi-tiered pension insurance system and can effectively ease the burden on pension financing. However, a widespread lack of financial cognitive ability among elderly residents often leads to cognitive biases towards the operating principles and potential benefits of HRMs, creating “insufficient effective demand” in China's HRM market. This study empirically examines how limited financial cognitive ability constrains the demand willingness to use HRM services. The findings reveal: (1) Elderly residents with higher financial cognitive ability are better able to understand and objectively evaluate the operating principles and potential value of HRMs, thus displaying a stronger willingness to utilize these services. (2) Bequest motivations and risk preferences are significant mediators through which financial cognitive abilities influence HRM demand willingness. (3) Financial education and increased social interaction among elderly residents substantially reduce the negative impact of limited financial cognitive ability on their demand willingness for HRMs.
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