China Household Finance Survey Research Articles

Unravelling the influence and mechanism of agricultural inputs on rural poverty vulnerability: Evidence from China

Agricultural inputs have a significant catabatic effect on rural poverty at present. However, few studies have assessed whether agricultural inputs inhibit the intending probability of being vulnerable to rural poverty, referred to as poverty vulnerability. Poverty vulnerability studies, which focus on the likeli-hood of poverty among households in the future, have forward-looking and prognostic features in poverty research. Such research provides essential tools for describing mechanisms that can eradicate poverty. This study investigates the impact of agricultural inputs on rural poverty vulnerability and the mechanisms of action, using data from the 2015 China Household Finance Survey (CHFS). The empirical results show that agricultural inputs significantly suppress the probability of rural poverty vulnerability. The results hold after replacing the poverty criterion, poverty vulnerability criterion, and core explanatory variables. To overcome the endogeneity problem created by possible reverse cau-sality and omitted variables in the baseline model, this study uses the instrumental variables method to test endogeneity. The study also applies a treatment effects model and propensity score matching method to estimate and address any endogeneity problems due to explanatory variables. The findings also remain robust and significant after addressing the endogeneity problem. Further analyses indicate that the inhibitive effect of agricultural inputs on rural poverty vulnerability is mainly achieved through increased agricultural yields, improved physical health, and increased opportunities for entre-preneurial behavior. A heterogeneity analysis finds that the inhibitive effect of agricultural inputs on poverty vulnerability is more pronounced in Midwest China, in households with physically healthy household heads, and in families whose leaders have risk preferences. Our findings provide empirical evidence that can help inform forward-looking and prognostic policies for developing countries when formulating anti-poverty strategies.

Do residential patterns affect women's labor market performance? An empirical study based on CHFS data.

Based on China Household Finance Survey (CHFS) data from 2019, this paper explores the impact of the residential pattern of coresidence with parents on the labor market performance of women in married families with minor children. The study finds that coresidence with parents significantly increases the possibility of female labor market participation and positively impacts women's employment income. To overcome the potential endogeneity problem of residential patterns, this paper uses the Heckman two-step method and the conditional mixed process estimation method (CMP method) for regression, and the conclusions remain robust. The mechanism analysis shows that coresidence with parents has both grandchild care and elderly care factors, which have a spillover effect and a crowding-out effect on female labor market performance, respectively. Since the spillover effect is more significant than the crowding-out effect, coresidence with parents positively impacts women's labor market performance. The heterogeneity analysis shows that in terms of labor force participation rate, coresidence with parents has a more significant impact on women in families with children aged 0-6, women in families without boys, and women in families with employed husbands. In terms of income, coresidence with parents has a more significant impact on women in families with employed husbands. This study provides a new perspective for promoting female labor market performance and can serve as a reference for future policy formulation.

Study on the influence of Internet finance on urban household savings rate: Evidence from China

This study aims to investigate the impact of Internet finance on the urban household savings rate. We constructed a theoretical model to depict the mechanism of how Internet finance influences urban household savings rates. For empirical analysis, we use the cross-sectional data from the China Household Finance Survey (CHFS) and conduct ERM to attain the extent to which Internet finance affects savings rates. The results show that the behavior of urban households participating in Internet finance has a significantly reduced effect on the urban household savings rate. In addition, the results of heterogeneity analysis show that the effect of Internet finance on the savings rate for urban households with a low level of assets and income is stronger and more significant, which has strong political implications. The results also show that households with older average age are not significantly affected by Internet finance, which reveals the possible limitations. This study provides a theoretical model to reveal the mechanism of how Internet finance reduces household savings rate and uses empirical analysis to measure the marginal influence of Internet finance on urban household savings rate, as well as offers suggestions for better development of Internet finance.

Does rural-urban migration matter in the marketization of land rentals in China?

ABSTRACT Drawing on data from the 2015 China Household Finance Survey, this paper assess the links between rural-urban migration and the marketization of land rentals. The estimated results indicate that farm households with more migrant labour are less likely to participate in land rentals, and lessees with more agricultural labour tend to use the rented land for non-grain production. Meanwhile, lessees with less migrated labour are more likely to rent land for profit and pay high land rent, even when land rentals are conducted between acquaintances. Further evidence shows that lessors with more migrated labour have a higher probability of leasing farmland for for-profit purposes and obtain high land rent. Our analysis reveals that with rural-urban migration, the marketization of land rentals between acquaintances in rural China increases if there emerge large numbers of lessees who are specialized in agricultural production.

Access to credit cards and household labor participation: Evidence from China

Using two-wave panel data from the China Household Finance Survey (CHFS), this study aims to examine the impact of credit card access on household labor participation in China. The findings reveal a significant positive relationship between credit card use and labor market decision, even after addressing concerns related to endogeneity and conducting various robustness checks. Moreover, it suggests that the act of paying off credit debt could serve as a potential mechanism that motivates household members to join the workforce. There is further evidence indicating that carrying a credit card may enhance work intensity and boost entrepreneurial activity.

A Study of the Impact of Mobile Payment on the Enhancement of Consumption Structure and Pattern of Chinese Rural Households

Amidst China’s economic transition towards high-quality development, the latent potential of the rural consumer market has been significantly unlocked, rendering the evolution of rural household consumption patterns a pivotal area of research. In this paper, we empirically investigate the influence of mobile payment on the transformation of consumption patterns within Chinese rural households, utilizing data from the China Household Finance Survey 2017 and China Household Finance Survey 2019. This study’s findings reveal the following key points: Firstly, mobile payment significantly contributes to the enhancement of the consumption structure within rural households. Secondly, the mechanistic analysis demonstrates that mobile payment plays a pivotal role in alleviating mobility constraints and optimizing the consumption environment, thereby facilitating the improvement of rural households’ consumption patterns. Lastly, the heterogeneity analysis indicates that mobile payment has a more pronounced effect on the upgrading of consumption structures among rural households with older household heads and higher education levels. In light of these findings, this paper suggests advancing the development of mobile payment infrastructure in rural areas, enhancing the proliferation of smartphones in rural regions, and bolstering financial education initiatives within rural communities.

Is the happiness of Chinese truly the highest in the world? The impact of basic public services on happiness.

Based on the survey report by the United Nations Sustainable Development Solutions Network (SDSN) and Ipsos Group, the world ranking of Chinese people's happiness shows a significant gap. This study attempts to analyze the subjective well-being of Chinese residents through public database from the China Household Finance Survey Center in 2017. An ordered Probit model is constructed to investigate the impact of non-monetary factors, specifically basic public services, on the subjective well-being of Chinese people. The results indicate that: (1) The subjective well-being of Chinese residents is found to be lower than what the survey report indicated. (2) Basic public services have a significant positive impact on residents' happiness. (3) Social trust played a moderating role, positively influencing the relationship between basic public services and residents' happiness. (4) The impact of basic public services on happiness varied significantly depending on factors such as age, registered residence, and places of residence. To enhance the happiness of Chinese residents, it is recommended to focus on improving the equalization of basic public services and establishing a robust basic public service system. These measures can effectively contribute to the overall well-being and happiness of the population.

Digital penetration and residents’ entrepreneurial decision

This paper selects survey data from the China Household Finance Survey (CHFS) for 2017, 2019, and 2021 to explore the impact of digital penetration on residents' entrepreneurship. It is found that digitization helps promote residents' entrepreneurship; there is heterogeneity in the impact of digital penetration on the probability of entrepreneurship among residents with different levels of household wealth, and the positive effect of Internet use on the probability of entrepreneurship increases with the level of wealth, but the positive effect of mobile payment use is more significant for entrepreneurship among residents with low to medium levels of wealth distribution.

E-commerce participation, digital finance and farmers' income

PurposeIt is imperative to achieve sustainable growth in farmers' earnings to sustain poverty alleviation efforts and achieve rural revitalization goals. The authors investigated the nature of the non-linear relationship between farmers' e-commerce participation and income growth, analyzed the rationale behind this correlation and examined the moderating effect of digital finance on this relationship.Design/methodology/approachThe authors conducted an empirical investigation using rural household data from the China Household Finance Survey and the regional digital finance index compiled by Peking University. The authors employed a fixed-effect model and a moderating effect model to identify the non-linear influences of e-commerce participation on farmers' income and to analyze the positive synergies of digital finance. The authors used identification and estimation techniques to mitigate the endogeneity problem, specifically employing heteroscedasticity-based instruments.FindingsThere is an inverted U-shaped relationship between e-commerce participation and farmers' income. Digital finance reduces the declining trend in the marginal effects of e-commerce and increases marginal values. Furthermore, the synergistic effect can promote the quality and efficiency of business activities by easing credit constraints, reducing risk aversion and stimulating innovative activities, which in turn can lead to sustained revenue growth.Originality/valueFew studies have focused on the non-linear relationship between e-commerce and farmers' income. This implies that achieving sustained income growth using e-commerce alone is difficult. The synergy between e-commerce and digital finance is a feasible path for achieving this goal.

Social support and household stock market participation

This study investigates the relationship between social support and stock market participation using data from the China Household Finance Survey (CHFS). Both intangible and tangible dimensions of social support are explored to examine their impact on stock market participation decisions. The empirical findings demonstrate that both support dimensions (i.e., intangible and tangible) would positively influence stock market participation, and intangible support has a greater impact as compared to tangible support. Moreover, this paper offers physical health and mental happiness to explain the mechanisms of social support.

How can digital financial inclusion reduces relative poverty? An empirical analysis based on China household finance survey

This study identifies the role and mechanism of digital inclusive finance in reducing relative poverty by selecting 2017, 2019, and 2021 China Household Finance Surveys (CHFS) as the research sample. The study finds that digital inclusive financial development can significantly reduce the likelihood of households falling into relative poverty; digital inclusive financial development can alleviate the formal credit constraints to which households are subjected, increase the allocation of risky financial assets to households, and support the entrepreneurial behaviors of rural households, thereby reducing the likelihood of households falling into relative poverty.

Hubris or talent? Estimating the role of overconfidence in Chinese households’ investment decisions

We document the extent to which overconfidence in one’s financial literacy (FL overconfidence) plays a role in households’ reported financial risk aversion and their actual investment behavior, using data from the China Household Finance Survey. We measure FL overconfidence by estimating the gap between people’s self-reported financial literacy and their objectively measured financial knowledge. Our results indicate that FL overconfidence is negatively associated with self-reported financial risk aversion. Additionally, FL overconfidence is positively associated with the likelihood of having a brokerage account, holding risky financial instruments (other than just stock), and a proportion of assets allocated towards risky assets. We then use machine learning methods to predict which factors are most important in determining households’ risky investment decisions. We find that overconfidence plays a significant predictive role. Our work signals that households’ risky investments may be driven by biased optimism about their own financial know-how rather than their actual knowledge. We conclude that financial literacy programs should not only teach financial concepts but also make program participants aware of their own biases.

Financial literacy, liquidity constraits and household risk asset allocation

This paper empirically analyzes the relationship between financial literacy, liquidity constraints and household risky asset allocation using survey data from the China Household Finance Survey (CHFS) for 2017, 2019 and 2021. The study finds that improved financial literacy significantly increases households' demand for risky assets; improved financial literacy eases household liquidity constraints, weakening the impact of liquidity constraints on household risky assets; and improved household financial literacy mitigates constraints on household liquidity, leading to greater demand for risky assets.

Digital Finance and Entrepreneurial Return Rate: Effects, Mechanisms and Inequality

This study matches the digital financial inclusion index with micro panel data from the China Household Finance Survey (CHFS) in 2015, 2017, and 2019, and explores the impact of digital finance on the return rate of entrepreneurship. The results show that the effect is positive—entrepreneurial households in prefectures with higher digital finance obtain higher return rates—and remarkably reliable to a battery of endogeneity and robustness tests. Mechanism analysis indicates that the positive effect of digital finance on the return rate of entrepreneurship is achieved mainly through facilitating external financing and reducing financial transaction costs. Further research finds that the spillover effect of digital finance has obvious Internet bias: the “digital dividend” only extends to the advantaged classes who have access to the Internet—non-rural and migrating rural entrepreneurs, but for non-migrating rural entrepreneurs generally facing digital exclusion, digital finance has little effect on their return rate. The empirical evidence presented in this study has important policy implications for accelerating the digital finance process, promoting high-quality entrepreneurship development, and boosting digital poverty groups to break stratum solidification.

Research on the impact of internet use on fertilizer and pesticide inputs: Empirical evidence from China

Fertilizers and pesticides are important agricultural production materials. Excessive use of fertilizers and pesticides can cause negative impacts such as decline in the quality of farm products and damage to the ecological environment. Increasing the efficiency of fertilizers and pesticides is an important step to accelerate the green transformation of agriculture. Using data from the 2015 China Household Finance Survey, this paper analyzes the impacts of Internet use on fertilizers and pesticides by farmers, and the mechanism behind the action with the help of the propensity score matching method and the instrumental variable method. The findings are: (1) Farmers who use the Internet have greater inputs of fertilizers and pesticides compared to farmers who do not use the Internet. (2) Farmers who do not use the Internet would have their inputs of fertilizers and pesticides increased by 21.9% and 47.7%, respectively, if they had used the Internet under the counterfactual hypothesis. (3) In the heterogeneity analysis, Internet use plays a positive and significant role in the inputs of fertilizer and pesticide in the eastern part of China, and Internet use has greater impact on pesticide inputs than on fertilizer in central and western regions. (4) Internet use has a positive and significant effect on fertilizer and pesticide inputs in both lower scale and higher scale operations, and a positive but not significant effect in moderate-scale operations.

Cognition ability, financial advice seeking, and investment performance: New evidence from China

AbstractThis paper examines how cognitive ability affects households' demand for financial advice and whether households with financial advisors reap better investment returns in China. Using data from the nationally representative China Household Finance Survey (CHFS) and China Family Panel Studies (CFPS), we find that math ability (i.e., one domain of cognitive ability) has a significant and negative effect on households' propensity to hire financial advisors, whereas the impact of verbal ability (i.e., another domain of cognitive ability) on seeking financial advice is insignificant. The analysis also suggests that the influence of cognitive limitation is larger for less educated and financially literate households. We conduct a regression discontinuity based on the Huai River policy, supporting the causal influence of cognitive ability on financial advice seeking. Furthermore, we find no evidence that financial advice improves investors' investment performance.

Digital Rural Construction and Rural Household Entrepreneurship: Evidence from China

Promoting rural entrepreneurship is an important approach to achieving rural revitalization, accelerating the construction of a new development pattern, and enhancing the well-being of farmers. Based on the County Digital Rural Index (CDRI) and the China Household Finance Survey (CHFS), we empirically examine the impact and role of digital rural construction (DRC) on rural household entrepreneurship. Our findings are as follows: (1) DRC plays a vital role in facilitating entrepreneurial behaviors (EB) and entrepreneurial performance (EP) among rural households. (2) DRC indirectly fosters rural household entrepreneurship by facilitating resource acquisition and opportunity identification. (3) Our heterogeneity analysis reveals that DRC’s promotion effect is stronger among local entrepreneurs and individuals with risk-averse tendencies. Additionally, DRC has a more pronounced effect in stimulating EB within lower-income families, while its impact on EP shows the opposite trend. Furthermore, DRC’s influence on rural household entrepreneurship is particularly significant in regions with more advanced digital rural development. (4) Additionally, we observe a significant positive impact of the four dimensions of DRC on rural household entrepreneurship, further affirming the role of DRC in driving rural household entrepreneurship. In the digital economy era, this study provides empirical evidence to promote the integration of digital technology and rural entrepreneurship, offering valuable insights for advancement in this domain.

Does the Financial Literacy of Householders Affect Household Credit Constraints?——Evidence from China

Financial literacy is gaining increasing importance as a policy objective in many countries. A growing literature has examined the role of financial literacy in household financial behavior. However, there is a little literature on analyzing household credit constraints from the perspective of financial literacy. This paper analyzes the impact of householders’ financial literacy on household credit constraints by using data from the 2017 China Household Finance Survey (CHFS2017) and using Probit regression analysis method. We find that higher financial literacy is significantly related to mitigation of the credit constraints.The main conclusion is that the householders’ financial literacy has a significant impact on household credit constraints. Households with higher levels of financial literacy are more likely to alleviate credit constraints.Therefore, improvements in financial literacy could mitigate the credit constraints, and thereby promote financial inclusion.

Online or not online: the impact of business owner’s risk preference on the adoption of e-business

AbstractThe significant growth of internet users has driven businesses to develop their capacity in e-commerce and meet the increasing demand for e-consumption, e-services, and e-business. To gain the benefits of e-business, firms may choose to extend or transit their offline-operated businesses to online or hybrid modes. Opportunities are accompanied by risks in this process. Therefore, it is important to understand how business owners’ financial risk preferences affect their choice of business operation models, namely, online and offline operations. Using data from the China Household Finance Survey (CHFS) in 2017 and 2019, this study examined the impacts of business owners’ risk preferences on e-business adoption, considering social insurance as a moderator on the relationship between risk effect and online business operation. In addition, we used heterogeneity examination to test for regional differences between rural and urban areas. Our results show that, compared to high-risk takers, low-risk takers are less likely to choose online or hybrid businesses; and having social insurance reduces the effect of risk preference on adopting e-business. This finding indicates social insurance may provide financial security to business owners with low-risk preferences and makes them more likely to adopt online business, whilst it may distort adoption incentives for high- and medium-risk groups. Results of the heterogeneity examination suggest a discrepancy in the risk preference effect on the adoption of e-business between the rural and urban areas: the impact of risk preference is found to be significantly higher on businesses in the rural area than those in the urban area.

Explainable artificial intelligence for digital finance and consumption upgrading

Recently, the role of digital finance in promoting consumer upgrades has become increasingly evident. By applying boosting trees and Shapley values, we proposed an explainable artificial intelligence method to obtain more effective analysis results than those obtained using linear regression models.We studied the China Household Finance Survey data and the Digital Financial Inclusion Index of Peking University, which includes data from 34,643 and 40,013 households in 2019 and 2017, respectively. Our research shows that, the explainable artificial intelligence techniques can provide more innovative economic insights.