Finance Survey Research Articles

Impacts of liquidity constraints, wealth and debt on happiness

ABSTRACT Drawing on data from the China Household Finance Survey (CHFS) and employing the ordered logit model, this study investigates the joint effect of liquidity constraints and debt on household happiness. The analysis reveals that (i) the happiness of Hand-to-Mouth (HtM) households ensnared by liquidity constraints significantly lag behind that of their non-HtM counterparts; (ii) the impact of liquidity constraints on happiness varies across different wealth brackets of HtM households. In particular, the decrease in happiness among wealthy HtM households (holding positive illiquid assets) due to liquidity constraints is less pronounced than the decline experienced by less wealthy HtM households (holding non-positive illiquid assets); (iii) indebted HtM households with permanent liquidity constraints manifest distinctly lower happiness compared to those facing temporary constraints. To address potential endogeneity concerns, propensity score matching is employed, and various metrics of happiness and liquidity constraints are utilized as robustness measures, all of which affirm the aforementioned conclusions. These findings underscore the need for tailored policy interventions that acknowledge the heterogeneous nature of household financial circumstances. Policymakers should consider targeted support mechanisms for HtM households grappling with liquidity constraints, while also recognizing the differential impact of such constraints based on wealth levels.

Cultural Diversity and Mass Entrepreneurship: Evidence from China Household Finance Survey and Dialect Data

Cultural Diversity and Mass Entrepreneurship: Evidence from China Household Finance Survey and Dialect Data

Family entrepreneurship and regional digital finance access: evidence from household entrepreneurship in China

ABSTRACT Using data from the China Household Finance Survey (CHFS) conducted in 2015, 2017, and 2019, in conjunction with the regional digital financial inclusion index developed by Peking University, we investigate the influence of regional digital finance accessibility on Chinese household entrepreneurship. The findings reveal that households in regions with better digital finance access exhibit a greater inclination towards household entrepreneurship. Among the – sub-indicators, the breadth of coverage and the use of credit exert the most significant influence. Furthermore, by employing casual mediation analysis in instrumental variable settings, we find that the physical bank outlet networks act as a negative transmission mechanism in the relationship between regional digital finance access and household entrepreneurship. This negative mediation effect amplifies with the proliferation of bank outlets. Heterogeneity analysis shows that the positive impact of regional digital finance access is particularly significant among households without commercial insurance and financial literacy. We recommend that governments advocate broader commercial insurance access and promote financial literacy in communities.

Financial income and married women’s labor participation in urban China

Will financial income lead to a decreased labor force participation by its negative income effect? Using the 2017 China Household Finance Survey, we find that the household financial income significantly increases married women’s probability of labor force participation in urban China, which stands in sharp contrast with transfer income, another non-labor income. We believe that this is because of the ”cash in advance” property of financial income, that is, the household must accumulate cash beforehand in order to gain in the financial market. We further show that both the financial market participation decision and level of invested financial asset holdings lead to an increased labor participation. Our results dismiss the suspicion that engaging in the financial market may allure or distract people from working.

Digital Inclusive Financial and Household Fertility:Discoveries Based on Dual Machine Learning Algorithm

The continuous decline in fertility rates and the postponement of childbirth represent significant social issues in China. Utilizing data from the China Household Finance Survey (CHFS) spanning 2013 to 2019, this paper employs a dual machine learning algorithm (DML) to estimate the causal effects of digital inclusive finance (DIF) on family size and the age at first childbirth, while also exploring the underlying mechanisms. The findings indicate that DIF has a modest positive impact on the household fertility rate and a notable negative effect on the age at first childbirth. Specifically, DIF has contributed to a slight increase in the number of births by reducing the opportunity cost of childbirth for households and has significantly lowered the age of first childbirth by mitigating income fluctuations. Given its positive effects, DIF should be actively promoted.

Exploring the Mechanism and Path of Financial Literacy's Impact on Consumption of Middle-aged and Elderly Rural Residents: Micro-evidence from CHFS Data

Based on the data from the three rounds of the China Household Finance Survey (CHFS) in 2015, 2017, and 2019, this study systematically explores the mechanism and path through which financial literacy influences the consumption patterns of middle-aged and elderly individuals in rural areas. The findings reveal that financial literacy plays a positive role in enhancing the consumption levels of this demographic group, while family satisfaction also significantly promotes their consumption growth. Furthermore, this research uncovers that Internet usage serves as a mediating factor between financial literacy and consumption among middle-aged and elderly rural dwellers, and risk preference significantly moderates the relationship between financial literacy and their consumption. It is noteworthy that the impact of financial literacy on the consumption habits of middle-aged and elderly rural populations varies across different regions. This study contributes novel insights to the theoretical understanding of the relationship between financial literacy and consumption among middle-aged and elderly rural residents, and offers empirical evidence and data-driven recommendations for elevating their consumption levels. It possesses both substantial theoretical value and practical implications for guiding policy and practice.

A Study of the Impact of Population Aging on the Effectiveness of Household Financial Asset Allocation

Based on the perspective of population aging, this paper explores the impact of aging shocks on household financial asset allocation behavior, and constructs cross-period tracking panel data based on the 2015, 2017, and 2019 China Household Finance Survey (CHFS) data to empirically investigate the mechanism by which population aging affects different dimensions of household financial asset allocation behavior. The results of the study find that (1) population aging significantly inhibits household portfolio effectiveness; and this conclusion still holds after replacing variables and robustness testing of the model. (2) The mechanism analysis illustrates that population aging affects household financial asset allocation effectiveness through wealth constraints and health risk paths. (3) Heterogeneity analysis illustrates that there is urban-rural and wealth heterogeneity in the impact of population aging on financial asset allocation. The negative impact of population aging on financial asset allocation is more pronounced in rural households and in households with low wealth levels.

The impact of household digital transformation on household energy efficiency: Empirical evidence from Chinese households.

Carbon emissions from household consumption are an important part of global energy consumption, and household digital transformation is vital for realizing green and low-carbon development. Using data from the 2019 China Household Finance Survey, this study empirically examines the effect of household digital transformation on household energy efficiency. The results show that household digital transformation significantly improves household energy efficiency across all quantiles. This effect varies by consumption type, with the most pronounced improvements in food, housing, and other consumption categories. The impact is stronger for households with elderly members. Per capita household income and education level serve as important mediating and moderating mechanisms, respectively. Unlike previous macro-level studies, this research provides micro-evidence on the impact of household digital transformation on energy efficiency, explores the underlying mechanisms through income and education effects, and examines heterogeneous impacts across different consumption types and household characteristics. These findings offer important policy implications for leveraging digital transformation to enhance household energy efficiency and promote sustainable development.

Impact of adjusted fertility policies on household consumption patterns in China

China's fertility policy adjustments have impacted family fertility decisions but have not reversed the declining birth rate, with economic pressures playing a significant role. This study utilized data from the China Household Finance Survey (CHFS) and treated the implementation of China's "two-child" policy as a natural experiment. Using a propensity score matching-difference-in-differences model, the study analyzed data from four periods before and after the policy change to examine how having underage children and additional children affects household consumption behavior. The results indicate that household consumption increases with the number of children, as families with newborns experience higher overall consumption levels. The addition of a second child amplifies this effect, but per capita consumption expenditure decreases as family size grows. Differences in consumption patterns were observed between families with an additional first child and those with a second child. Furthermore, the impact of additional children on household consumption varies significantly depending on the family's education level. The study suggests that the government should design differentiated fertility policies tailored to family characteristics to reduce economic and childcare pressures and create a more supportive environment for family decision-making.

The dual driving mechanism of financial literacy and risky financial assets on household entrepreneurial decision-making

This paper selects survey data from the China Household Finance Survey and Research Center (CHFS) in 2017, 2019, and 2021 as samples to explore the entrepreneurial decision-making mechanism jointly driven by financial literacy and risky financial assets. The study finds that financial literacy has a significant positive impact on individual households' entrepreneurial decisions. Additionally, risky financial assets partially mediate the relationship between financial literacy and individual households' entrepreneurial decisions.

Basic public service and residents' travel carbon time intensity: Impact and mechanism

Investigating demand-side emission reduction through individual behavior and public infrastructure remains a focal point, yet existing studies lack a temporal perspective on their relationship. This study introduces the concept of carbon time intensity (CTI), which refines carbon emission analysis from total quantity to temporal structure, aiming to deepen the understanding of demand-side mitigation through an integrated spatiotemporal framework. This study, drawing on data from the 2021 China Time Use Survey and Household Finance Survey, investigates the mechanisms by which urban basic public service (BPS) affect residents' travel carbon time intensity (TCTI). The analysis reveals that enhancing BPS quality significantly reduces TCTI, primarily through two pathways: altering residents' choices toward low-carbon travel and reinforcing green living concepts with marginal effects of 0.223 and 0.278 respectively. Moreover, the impact of BPS on TCTI exhibits clear heterogeneity across income levels, urban-rural divisions, and geographic regions, with high-income urban populations in developed areas demonstrating substantial yet untapped potential for carbon reduction. Additionally, the gradient boosting tree model identifies a notable plateau in BPS improvements' effect on TCTI, alongside persistent long-term mitigation effects, both following pronounced non-linear patterns. This study preliminarily explores the feasibility of demand-side emission reduction by examining the temporal structure of individual travel-related emissions and delineates key patterns in TCTI influenced by BPS. It provides a theoretical framework for advancing demand-side mitigation through a spatiotemporal approach, offering novel insights and methodologies for more personalized emission reduction strategies within this context.

An empirical study on the impact of household debt level on consumption behavior: Based on the mechanism of the housing provident fund system and risk preference

Based on 2015, 2017, and 2019 China Household Finance Survey (CHFS) data, this paper analyzes the relationship between the housing provident fund system, household debt, and consumer behavior. The empirical analysis reveals that the housing provident fund system has a significant positive incentive effect on household consumption, while household debt has become an obstacle to consumption growth. At the same time, risk preference plays an important mediating role between debt and consumption. It is noteworthy that there are significant differences in the impact of household debt on consumption patterns between urban and rural residents.

Post-compulsory education of children and household asset allocation

We investigate the impact of Post-compulsory Education (PCE) on household asset allocation in this paper. As an investment in children's development, families face a trade-off between PCE and other assets. Based on the data from six representative rounds of the China Household Finance Survey (CHFS), we conduct extensive empirical analyses and find that households with children in the PCE stage, such as senior high schools or universities, exhibit lower proportions of illiquid assets and high-risk assets. We further show that liquidity constraints and expectations of future income are two basic mechanisms through which PCE affects household asset allocation, and the former is relatively stronger. In the heterogeneity analyses, we find that the impact of PCE on family asset allocation is more pronounced in families where parents have educational attainment below the university degree, in families with male children, in rural households, and in families that value education.

Internet use and household debt: insights from rural China

ABSTRACT Internet use is accelerating in rural communities of developing countries. Although much attention has been devoted to the effects of Internet use on subjective well-being, income growth, poverty reduction, digital financial inclusion, and social connections in these communities, little is known about how it affects their indebtedness. This paper bridges this gap by investigating the association between Internet use and household debt in rural China. We use a conditional mixed process model and the instrumental-variable-based causal mediation framework to analyse the 2017 China Household Finance Survey data. The results show that Internet use and household debt are positively associated: household debt is 5,370 yuan higher among Internet users than non-users. Using the Internet increases household debt through its effects on consumption and investment spending. Targeted initiatives to help rural residents gainfully utilize the Internet to improve their financial well-being should be implemented. Strengthening legislation to allow rural residents to securely and responsibly increase their investment and consumption using the Internet will enhance rural communities’ welfare as Internet access becomes widespread over the coming years.

Chinese Household Finance Impacted by Climate Change - Evidence from Stock Investment

This paper conducts an empirical analysis using data from a survey of Chinese household finance and prefecture-level data of historical temperature. The results show that the impact of temperature fluctuations on household financial behavior reveals a U-shaped relationship, with the inflection point of temperature fluctuations located at 0.5463°C. The part before the inflection point of the "U" relationship is mainly due to the change in investor mood caused by climate change, which has a negative effect on investment intention. The part after the inflection point is mainly because the rise in temperature significantly increases investors' risk appetite, leading to an increase in investors' willingness to enter the market. The positive effect is greater than the negative one, which leads to an increase in the share of equities in total financial assets. Moreover, we confirm that the household savings level strengthens the inhibition effect of climate change on household financial behavior, while the education level weakens the inhibition effect of climate change on household financial behavior.

The promise and perils of digital finance: evidence from crime rate in China

ABSTRACT This study explores the societal impact of the rapid global expansion of digital finance, employing China Household Finance Survey within a criminal economics framework. We found that the development of digital finance effectively alleviates the overall crime incidence, particularly in regions with higher mobile phone usage and lower proportions of older adults. The crime reduction effect correlates with the decline in cash transactions and the promotion of entrepreneurial activities. Moreover, variations exist in different digital finance services on property and non-property crimes. This empirical evidence offers valuable insights into the broader implications for countries experiencing unprecedented digital finance growth.

Examining the Impact of Digital Inclusive Finance on Urban and Rural Consumption Patterns: Insights from China Household Finance Survey in 11 Coastal Regions

Examining the Impact of Digital Inclusive Finance on Urban and Rural Consumption Patterns: Insights from China Household Finance Survey in 11 Coastal Regions

Health, Insurance, and Social Capital’s Impact on Housing Debt and Assets Using a Partial Least Squares Structural Equation Modeling Technique

China’s current real estate market transactions are relatively subdued; hence, finding means to repower the engine for further development becomes vital. However, few studies investigated the relationships between family non-economic factors, assets, and housing debt. This study highlights the impact of family members’ health, insurance, and social capital’s impact on housing debt and assets. The family-size data from the China House Finance Survey are analyzed using a partial least squares structural equation model. The results indicate that family members’ poor health and uninsured endowment insurance individuals negatively affect housing debt and family assets. In contrast, the impact of medical insurance is insignificant. Besides, social capital substantially and positively impacts assets and debts. The labor supply and the proportion of kids have a negligible impact. Hence, this study recommends that loan-offering enterprises may change their marketing targets according to family situations, such as health status and insurance coverage. The government might promote endowment insurance and strengthen higher education to revitalize the real estate industry.

Financial Literacy, Fintech, and Risky Financial Investment in Urban Households—An Analysis Based on CHFS Data

In recent years, China’s financial markets have come under increasing scrutiny. In order to explore the impact of financial literacy on urban household investment in the risk financial market, this paper used the micro-data of the 2019 China Household Finance Survey (CHFS) to start from two perspectives: household risk financial investment and the number of investment financial products, namely the breadth of investment. By constructing a probit model and ordered probit model for empirical analysis, the main conclusions are as follows. Benchmark regression results show that the improvement of financial literacy can significantly promote urban households to make risky financial investments and can significantly broaden the types of risky financial investments. Based on the IV-probit model and two-stage least square method, the endogeneity test using the economic and financial information attention degree as the instrumental variable showed that the model results were credible. The robustness test showed that the model results were basically correct. Furthermore, the mechanism analysis found that the use of fintech played an intermediary effect in the process of financial literacy affecting urban household risky financial investment and the amount of investment. This indicates that the improvement of financial literacy can improve the probability of using fintech, thus promoting the household risky financial investment behavior. Heterogeneity analysis based on risk attitude showed that financial literacy had a greater effect on the improvement in the risky financial investment behavior of risk-inclined families, followed by risk-neutral families, and had the least effect on risk-averse families. The research conclusions of this paper are of practical significance to solve the problems related to urban household financial market investment. Therefore, this paper puts forward some suggestions for reference, especially in terms of financial education and the digital economy.

Personal income tax reform and household savings rates: Evidence from a quasi-natural experiment in China

This study examines the effects of the 2018 personal income tax reform on household savings rates using data from the China Household Finance Survey (CHFS). Employing a quasi-natural experiment approach, our findings demonstrate that the reform has led to an increase in savings rates among Chinese households. Mechanism tests indicate that income uncertainty serves as the underlying mechanism linking the personal income tax reform to household savings rates. Heterogeneity analyses reveal that the impact of the personal income tax reform on household savings rates is particularly pronounced for households with lower income and those whose heads have lower levels of education. Additionally, the personal income tax reform has elevated the proportion of household development and enjoyment consumption in total consumption. This study provides a novel micro-perspective on the influence of Chinese fiscal policies on residents' saving behavior and offers valuable insights for promoting high-quality consumption and fostering high-quality economic development.