This article examines the optimal dynamic portfolio decisions for Chinese families, which acquire housing services from either renting or owning a house and can receive stochastic wage. Following the analysis framework of dynamic decision problem, we set up two models according to optimal portfolio choice theory and the ideology of psychological preference separately. Through using Chinese statistic data and applying numerical method this article finds out the optimal decision policy of Chinese families and reveals the interrelationship between the housing decision and the other consumption and investment decision of Chinese family.
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