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How Housing Affects Stock Investment—An SEM Analysis

Author

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  • Jiandong Li

    (Chinese Academy of Finance and Development (CAFD), Central University of Finance and Economics (CUFE), Beijing 100081, China)

  • Jianmei Zhao

    (China Academy of Public Finance and Public Policy (CAPFPP), Central University of Finance and Economics (CUFE), Beijing 100081, China)

Abstract

The extant literature regarding the effects of housing on stock investment shows inconsistent findings, either positive or negative effects have been reported. This paper investigates the mechanisms by which housing affects household stock investment through a structure equation model (SEM). Applying the data from the China Household Finance Survey (CHFS), we confirm and quantify the magnitudes of contemporaneous “wealth effects” and “crowd-out effects” of housing on household equity investment. Overall, the combined effect of housing on stock investment is positive in the context of urban China.

Suggested Citation

  • Jiandong Li & Jianmei Zhao, 2019. "How Housing Affects Stock Investment—An SEM Analysis," Economies, MDPI, vol. 7(1), pages 1-11, March.
    • Handle: RePEc:gam:jecomi:v:7:y:2019:i:1:p:26-:d:217058
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    References listed on IDEAS

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    2. Funk, Bryana & Amer, Saud A. & Ward, Frank A., 2023. "Sustainable aquifer management for food security," Agricultural Water Management, Elsevier, vol. 281(C).

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