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【May 29 Seminar】Russell Cooper: Household Finance in China
2017-05-26
Household Finance in China
Time: 12:30-14:00pm, May 29, 2017
Venue: Meeting room, Zhifu Xuan, NSD, PKU
Host: Yong WANG, Xin WANG, Jiajun XU
Speaker: Russell Cooper（Penn State University）
【Abstract】
This paper studies household financial choices in China, focusing on the high savings rate, low equity sharein portfolio composition and low participation rate in asset markets. These decisions by education group are studied in a life cycle model. Preference parameters, the cost of stock market participation and portfolio adjustment costs are estimated to match the financial decisions of different education groups. These estimates are compared to those obtained from a parallel study using US data. Key differences between China and the US portfolio decisions emerge from: (i) differences in income profiles and risk, (ii) differences in out-of pocket medical expenses, (iii) higher entry and adjustment costs in China, (iv) a lower consumption or in China exposing households to more risk and (v) differences in the estimated discount factors. Overall, households in China face more risks and larger costs of entering into asset markets. Low educated households are less patient and high education household more patient than their US counterparts.
【Speaker】
Russell Cooper is a Professor of Economics at the Penn State University. He has published papers on the American Economic Review, Journal of Political Economy, Review of Economic Studies, and other famous journals. His recent research interest includes firm dynamics, economics of education, household finance, as well as debt fragility of monetary unions. With regard to the Chinese economy, he has worked on dynamic labor demand, Chinese household finance, and factor misallocation.
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