Probe - Accounting, Auditing and Taxation

Study on the impact of Chinese household stock assets on residents' consumption

Jinshi Qiu

School of Finance and Public Management, Anhui University of Finance and Economics

DOI: https://doi.org/10.59429/paat.v8i3.15712

Keywords: stock market wealth effect; household consumption; development and enjoyment-oriented consumption

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Abstract

With the deepening of capital markets and the transformation of household financial asset structures, the link between the stock market and household consumption has become increasingly prominent. Using China Household Finance Survey data for 2015–2021, this paper examines the impact of household stock assets on consumption. Stock assets exert a significant positive wealth effect, with the promoting effect on development- and enjoyment-oriented consumption significantly stronger than that on total consumption and the effect on subsistence consumption relatively weak. Wealth appreciation works mainly through the direct wealth effect, and the precautionary saving motive holds for high-uncertainty households. The effect is more pronounced for urban households in central China and for households with high assets and high consumption.

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