The Influence of Financial Cognition on Rural Families’ Participation in Financial Market—An Empirical Test Based on the Risk Classification of Financial Assets

Abstract

In recent years, the per capita disposable income of Chinese residents has notably improved, and there are more and more residents participating in the financial market. Using 2015 CHFS data, this study divides financial assets into three categories according to asset risk: no risk, low risk, and high risk, and studies its impact on rural families’ participation in the financial market from the financial cognitive point of view. The main conclusions are as follows: China’s rural families are still mostly cash, demand deposits, and time deposits for participating in the financial market, and it is hard to accept other risk assets; financial cognition effectively improves the participation of rural households in the financial market, especially in the high-risk asset market; financial cognition will weaken the impact of other variables on rural households’ participation in the financial market, including risk-free asset market and risk asset market.