The 299th Wenlan Financial Forum

Abstract：

The wealth effect of assets is one of the core issues in the field of household consumption, but there has been continuous debate on whether China's stock market has a wealth effect. Based on the perspective of micro-level households, this paper evaluates the impact of stock market rallies on residents' willingness to consume and consumption inequality using propensity score matching-difference in differences and triple difference methods. The research conclusion shows that stock market rallies can significantly increase residents' willingness to consume, and this effect is higher for low-consumption groups, thus alleviating consumption inequality to a certain extent. Mechanism research indicates that stock market rallies enhance residents' willingness to consume by increasing property income and reducing precautionary savings motives. Further analysis finds that stock market rallies have a significant positive driving effect on residents' willingness to consume survival-oriented, development-oriented, and enjoyment-oriented consumption, but as households' speculative motives increase, the stock market wealth effect is gradually weakened. The impact of stock market rallies on residents' willingness to consume has significant heterogeneity characteristics, with the willingness to consume being more significantly increased among low-income groups, low-financial knowledge groups, and households with low liquid assets. Simulation analysis shows that when the stock market participation rate reaches 70% and the stock market return rate and GDP grow synchronously, it can significantly slow down the decline in China's average consumption propensity. The policy implications of this paper indicate that, under the premise of promoting the healthy development of the capital market, increasing residents' participation rate in the stock market will not only help to promote their willingness to consume and build a new development pattern of "dual circulation" driven by demand, but also help to reduce consumption inequality and achieve "shared development."

Speaker Introduction：

Xingjian Yi, Ph.D. in Economics (Postdoctoral), Professor of Finance (Level 2), is currently the Vice President of Guangdong University of Finance and Economics and a doctoral supervisor at the School of Finance, Guangdong University of Foreign Studies. He was the first Dean of the School of Finance at Guangdong University of Foreign Studies. He has been selected for the National Cultural Celebrity and "Four Groups of Talents" Program, the sixth batch of national "Ten Thousand Talents Program" leading talents in philosophy and social sciences, the national "Hundred, Thousand, and Ten Thousand Talents Program", and awarded as an "Outstanding Young and Middle-aged Expert with Contributions" and an expert enjoying special allowances from the State Council. He has also served as the "Vice President of the Chinese Association of Quantitative Economics", "Vice Chairman of the Chinese Association of Consumer Economics", and a member of the "50 Forum for Education and Research in Financial Technology", among others. He has presided over one major project of the National Social Science Fund and one leading talent project, three general projects of the National Natural Science Foundation of China, and more than ten other provincial and ministerial level projects. His research mainly focuses on household finance, applied microeconometrics, digital economy and digital finance, and other related fields. He has published over 120 papers in authoritative or core academic journals such as Economic Research, Management World, World Economy, Economics Quarterly, and Financial Research, as well as International Review of Economics & Finance. He has received more than 30 awards, including the fifth "Liu Shibai Economics Award" and the first prize of the Guangdong Provincial Philosophy and Social Science Outstanding Achievement Award.