Does Loss Aversion Limit Stock Market Participation?
Using the data of China Household Finance Survey(CHFS),this paper studies the impact of loss aversion on house-hold financial market participation and the depth of participation.It is found that increasing loss aversion inhibits households'par-ticipation in the stock market and reduces the proportion of households'allocation to stock assets.The results of mechanism test show that higher loss aversion will reduce the possibility of households participating in the stock market through subjective trust.In addition,it is found that the improvement of financial literacy and subjective well-being will weaken the inhibitory effect of loss aversion on stock market participation.The effect of loss aversion is more pronounced among low-income,low-net worth,and urban households.This paper provides new evidence for understanding the relationship between cognitive bias and family fi-nancial behavior.
Loss aversionStock market participationTrustSubjective well-being
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NSTL
万方数据
