Do Traditional Family Values Affect Household Asset Allocation? — Empirical from China

This paper provides a new explanation for the limited participation puzzle in the Chinese financial market from the perspective of traditional family values. Using the 2013 and 2015 China Household Finance Survey (CHFS) data, this paper finds a negative relationship between traditional family values and household investment in risky financial assets. We provide evidence that traditional family values increase residents’ risk preferences, precautionary savings, and housing asset investment mechanisms, and therefore influence household asset allocation. The study also finds that the inhibitory effect of traditional family values on household investment in risky financial assets is more pronounced in rural households, central and western regions, and areas with lower internet penetration and openness to external influences.