JACIII Vol.27 No.5 pp. 748-760
doi: 10.20965/jaciii.2023.p0748

Research Paper:

The Impact of Individual Heterogeneity on Household Asset Choice: An Empirical Study Based on China Family Panel Studies

Luyi Shen*,** ORCID Icon and Zeyang Li*,† ORCID Icon

*School of Statistics, Huaqiao University
No.668 Jimei Avenue, Jimei District, Xiamen 361021, China

Corresponding author

**School of Mathematics and Statistics, The University of Melbourne
Grattan Street, Parkville, Victoria 3010, Australia

January 5, 2023
April 8, 2023
September 20, 2023
household assets, personality traits, cognitive abilities

In China’s evolving market economy, household asset diversification and refinement have raised concerns about asset selection and rationalization for financial market development. Our research investigates the impact of individual heterogeneity factors, such as the “Big Three” personality traits and cognitive abilities, on household asset allocation behaviors, expanding upon the traditional focus on risky financial assets and the “Big Five” personality traits. We utilize data from the 2018 China Family Panel Studies and employ logistic and hurdle models to examine the breadth of household asset holdings. We utilize two-part models to explore the depth of household asset holdings. Our findings reveal the impact of different personality traits and cognitive abilities on the depth and breadth of different household assets. This study offers a more comprehensive understanding of household asset selection by considering various asset types and individual heterogeneity factors.

Cite this article as:
L. Shen and Z. Li, “The Impact of Individual Heterogeneity on Household Asset Choice: An Empirical Study Based on China Family Panel Studies,” J. Adv. Comput. Intell. Intell. Inform., Vol.27 No.5, pp. 748-760, 2023.
Data files:
  1. [1] I. Thielmann, G. Spadaro, and D. Balliet, “Personality and prosocial behavior: A theoretical framework and meta-analysis,” Psychological Bulletin, Vol.146, No.1, pp. 30-90, 2020.
  2. [2] H. J. Eysenck (Ed.), “A model for personality,” Springer Science & Business Media, 2012.
  3. [3] C. Spearman, ““General Intelligence,” Objectively Determined and Measured,” The American J. of Psychology, Vol.15, No.2, pp. 201-292, 1904.
  4. [4] L. S. Gottfredson, “Why g matters: The complexity of everyday life,” Intelligence, Vol.24, No.1, pp. 79-132, 1997.
  5. [5] Z. Jiang, C. Peng, and H. Yan, “Personality differences and investment decision-making,” Social Science Research Network, 2023.
  6. [6] D. De Bortoli, N. da Costa Jr., M. Goulart, and J. Campara, “Personality traits and investor profile analysis: A behavioral finance study,” PLoS One, Vol.14, No.3, Article No.e0214062, 2019.
  7. [7] S. D. Asebedo, M. J. Wilmarth, M. C. Seay, K. Archuleta, G. L. Brase, and M. MacDonald, “Personality and saving behavior among older adults,” J. of Consumer Affairs, Vol.53, No.2, pp. 488-519, 2019.
  8. [8] G. Donnelly, R. Iyer, and R. T. Howell, “The Big Five personality traits, material values, and financial well-being of self-described money managers,” J. of Economic Psychology, Vol.33, No.6, pp. 1129-1142, 2012.
  9. [9] F. Gomes, M. Haliassos, and T. Ramadorai, “Household finance,” J. of Economic Literature, Vol.59, No.3, pp. 919-1000, 2021.
  10. [10] S. Shimizutani and H. Yamada, “Financial literacy of middle-aged and older Individuals: Comparison of Japan and the United States,” The J. of the Economics of Ageing, Vol.16, Article No.100214, 2020.
  11. [11] S. Agarwal, J. C. Driscoll, X. Gabaix, and D. Laibson, “The age of reason: Financial decisions over the lifecycle,” NBER Working Paper, Article No.13191, 2008.
  12. [12] B. Mandal and M. P. Brady, “The roles of gender and marital status on risky asset allocation decisions,” J. of Consumer Affairs, Vol.54, No.1, pp. 177-197, 2020.
  13. [13] C. Christiansen, J. S. Joensen, and J. Rangvid, “Understanding the effects of marriage and divorce on financial investments: The role of background risk sharing,” Economic Inquiry, Vol.53, No.1, pp. 431-447, 2015.
  14. [14] M. Hillesland, “Gender differences in risk behavior: An analysis of asset allocation decisions in Ghana,” World Development, Vol.117, pp. 127-137, 2019.
  15. [15] A. Fagereng, C. Gottlieb, and L. Guiso, “Asset Market Participation and Portfolio Choice over the Life-Cycle,” J. of Finance, Vol.72, No.2, pp. 705-750, 2017.
  16. [16] A. Lusardi, P.-C. Michaud, and O. S. Mitchell, “Optimal financial knowledge and wealth inequality,” J. of Political Economy, Vol.125, No.2, pp. 431-477, 2017.
  17. [17] K. Atalay, R. Edwards, and B. Y. J. Liu, “Effects of house prices on health: New evidence from Australia,” Social Science & Medicine, Vol.192, pp. 36-48, 2017.
  18. [18] R. Alessie, S. Hochguertel, and A. van Soest, “Household portfolios in the Netherlands,” Social Science Research Network, Article No.2000-55, 2000.
  19. [19] Y. Zhang, Q. Jia, and C. Chen, “Risk attitude, financial literacy and household consumption: Evidence from stock market crash in China,” Economic Modelling, Vol.94, pp. 995-1006, 2021.
  20. [20] J. G. Cragg, “Some statistical models for limited dependent variables with application to the demand for durable goods,” Econometrica: J. of the Econometric Society, Vol.39, No.5, pp. 829-844, 1971.

*This site is desgined based on HTML5 and CSS3 for modern browsers, e.g. Chrome, Firefox, Safari, Edge, Opera.

Last updated on Sep. 29, 2023