Household Finance Research Articles

Digital Transformation, Credit Availability, and MSE Performance: Evidence from China

Against the backdrop of shrinking global demand and reduced expectations, the development of micro and small enterprises (MSEs) has attracted widespread attention. Based on 2017 and 2019 data from the China Household Finance Survey (CHFS), this paper examines the impact of digital transformation on the operating income of MSEs in China. The findings show that digital transformation significantly increases the operating income of MSEs by improving their access to credit. In addition, heterogeneity analysis indicates that the impact of digital transformation is more pronounced for MSEs in the growth stage and operating in central and western China.

Analysis of Family Wealth and Participation in Commercial Insurance Behavior within the Influence of Confucian Culture

Based on the data samples from the China Household Finance Survey (CHFS) in 2017 and 2019, this study delves into the intrinsic relationship between Confucian culture, family wealth, and household participation in commercial insurance. The research findings indicate that Confucian culture positively promotes household participation in commercial insurance; an increase in family wealth significantly enhances households' willingness to participate in commercial insurance. Further analysis reveals that family satisfaction plays a crucial intermediary role between Confucian culture and household participation in commercial insurance. Additionally, the impact of Confucian culture on household commercial insurance participation behavior exhibits significant regional differences.

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.

Portfolio flows and household portfolios

In this paper, we show that cross-border portfolio flows around the peak of the European Crisis induced households to rebalance their portfolios towards housing. Estimating difference-in-differences regressions around Draghi’s “Whatever It Takes” speech in July 2012 with household data from the ECB’s Household Finance and Consumption Survey, we find that portfolio inflows induce households with larger ex-ante bond and equity shares to rebalance more strongly towards housing. The effect is not driven by higher pre-treatment access to credit or higher credit growth during the treatment period and is stronger for wealthier and less risk-averse households.

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.

Contesting individualization and individualism in marriage in East Asia: Dual-income couples' monetary practices.

This study uncovers Taiwanese dual-earner couples' monetary practices and explores how the marriage institution is conceived of in the context of East Asian familism and the sweeping trend of individualism. Ample cross-national research has investigated household finances and money management among couples over time, yielding mostly Western-oriented insights. It is nevertheless matched with little evidence from East Asian societies that share similar trends of individualization. Drawing from interviews with 22 couples and 3 married individuals (N=47) in Taiwan, who are at least university-educated, middle-class, and on average in their mid-30s, this paper analyzes couples' monetary practices from a relationship constellation perspective that factors in resources from intergenerational transfer, as well as individual spouses' interpretation of their practices. Individualized management was found to be exceedingly prevalent among Taiwanese couples, unlike couples elsewhere that predominantly adopt pooling. Institutionalized individualization, on the one hand, posed higher hurdles for joint management and pooling. On the other, most interviewees showed an individualistic orientation in their practices, which can be seen as a strategy to anticipate and manage risks-marriage dissolution among others-in a highly uncertain world. Embedding monetary practices in the 'individualization without individualism' debate, this study unveils how the traditional marriage institution is implicitly challenged by not only increasing institutionalized individualization but also an ideational shift towards individualism, often assumed to not have taken root in East Asia. The empirical evidence from Taiwan sheds new light on both resource management in marriage and on how intimate relationships are constrained by institutional and socio-cultural contexts.

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.

Physical and mental well-being of older adults: examining the impact of financial support from male migrant children on Indian left-behind parents

BackgroundAmid high youth out-migration, India’s older parents face severe social, economic, psychological, and health crises due to their children’s separation. However, remittances from their migrant children alleviate economic hardships, improve healthcare access, and partially compensate for their absence. So, this study examines how adult-child migration affects older parents’ physical and mental health and how remittance support helps mitigate these challenges.MethodologyThis study used the 2011 Building a Knowledge Base on Population Ageing in India (BKPAI) dataset, the current study (n = 5122) employs bivariate statistics, logistic regression, and mediation analysis to address the objectives. Logistic regression determines the factors of self-rated health and depression, while mediation analysis is implied to understand the intermediate effect of financial support i.e. remittance on left-behind older adult health.ResultsThe findings indicate that approximately 43% of the study populations were left behind, meaning they have at least one migrant child. Notably, 20% of these left-behind older adults report poor health conditions, and 17% exhibit depressive symptoms, while the poor health and having depressive symptoms were lower among the non-left-behind older adults i.e., 13% and 12% respectively. The mediation analysis indicates that the likelihood of good self-rated health increased 1.35 times through the effect of remittance, which compensates for around 55% of the total adverse effect of migration.ConclusionThe consistent inflow of remittances serves to alleviate the impact on household finances, ensure food security, and address medical expenses. However, it is crucial to recognize that while remittances contribute significantly to economic stability, they cannot fully replace the physical presence of adult children, especially in terms of caregiving.

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

Analysis of the Application of Accounting Science to Family Life to Avoid Debt and Loans

In household life, it is required to manage household finances carefully, so that finances are controlled and avoid unwanted things such as debt and loans. The purpose of this study is to show how the application and role of accounting in the household consists of four aspects, namely budgeting, planning, recording and decision-making to prevent debt and online loans. The method in this study is descriptive analysis through a phenomenological paradigm. Data collection techniques through observation, interviews and documentation. The informants in this study were 10 housewives with a minimum diploma background in economics. The results of the study show that housewives carry out household financial planning by dividing the current needs that have been planned at the beginning of the month. The media used for financial records is a notebook or journal book that is written simply. Financial decision-making is carried out with the husband. The role of accounting in the household helps informants to plan household finances so that they can control household finances wisely.

Determinants on the selection of rural households’ financial assets in China: marketization or financial literacy?

Financial literacy is an indispensable factor in household asset allocation, but market-oriented reforms are also an external factor that cannot be ignored. Using data from the 2013 and 2019 China Household Financial Survey (CHFS), this paper investigates whether the individual’s ability or the market system hinders rural households’ participation and asset investment in the financial market. Findings reveal that both marketization and financial literacy positively affect residents’ financial activities, but the roles of the two are not the same. Financial literacy is an essential factor in increasing participation in the financial market. Moreover, marketization and financial literacy significantly affect rural financial asset allocation decisions in four ways: changing risk preference, using the Internet, alleviating liquid constraints and increasing education expenditure on offspring. Besides, households’ financial behaviors exhibit a stronger correlation with improved network infrastructure, robust legal frameworks, favorable business credit environments, higher social media penetration, and enhanced human capital.

SIMPLE BOOKKEEPING TRAINING FOR UMKM ACTORS IN SOUTH MERUYA VILLAGE

This Community Service Program was created in connection with the planned community service activities in the form of training with the theme "Simple Bookkeeping Training for MSMEs inSouth Meruya Subdistrict”.This training aims to improve knowledge and understanding for pas an MSMEin learning simple bookkeeping for his business activities.The purpose of PkM activitiesThis simple bookkeeping training can provide understanding benefits to pas an MSMEin compiling simple bookkeeping. The accounting process is a very important process in an organization or business because the accounting process is part of presenting business information related to profits and losses.The problem: 1)Bookkeeping System, accounting cycle and Financial Reports. 2) Partners have not been able to prepare bookkeeping documents and record them in detail and neatly according to the accounting cycle. 3) Partners have not been able to calculate profits in preparing Financial Reports according to the accounting cycle. 4) Marketing. Lack of understanding of business actors in choosing and determining market segments and market needs in the surrounding environment.Solution:Based on the problems that have been described in the situation analysis above, the solution that will be carried out is to provide training for MSME actors in the Meruya Selatan sub-district, West Jakarta so that they can easily understand and understand accounting so that they can make simple financial accountability reports related to home businesses or MSMEs.Target: It is expected that this activity will be for UMKM actors in Meruya Selatan sub-district, West Jakarta, so that they can understand and be skilled in accounting for personal, household and UMKM business finances in making their financial reports. Target output achievements:Improvement of community values (arts, culture, social, politics, security, peace, education, health).

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.

Household Budgets Among Different Income Groups in Klang Valley

Budgeting is a common approach financial advisors introduce to teach individuals how to manage their expenses. Without budgeting, however, family living expenses may exceed the available income and jeopardise the family's overall financial goals. Financial issues are one of the significant causes of instability among families, especially lowincome earners who live below the usual standard and have an income that can only go for food and housing, making it impossible to satisfy their family's needs and attain goals. This scenario puts low-income families in a problematic state or condition that can be resolved through adequate financial support. This study examines the dynamics of household budgeting practices across various income groups within the Klang Valley region. The study also aims to identify the importance of budget allocation and expenditure priorities among low-income, middle-income, and high-income households. It underscores the crucial role of financial literacy and planning factors in budgeting practices, empowering individuals with the knowledge to manage their finances effectively. Data were collected from 65 tourism industry workers with multiple backgrounds by distributing questionnaires using a convenient sampling approach. The data collected were analysed using the Statistical Package for Social Science (SPSS) software. The findings contribute to a better understanding of how income disparities shape household finances and inform policy interventions to enhance financial resilience and equity within the Klang Valley community.

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.

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.