A Study on Dynamic Modeling for Chinese Resident's Consumption and Investment Decision with Housing

摘要

We solve a realistically calibrated life-cycle model of consumption and portfolio decision for Chinese families with housing and stochastic labor income, and try to find the important factors for resident's consumption and investment decision. Our analysis demonstrates that labor income risk and house price risk crowd out the level of stockholdings because of the increase of protective saving, while down payment ratio reduces stockholdings of resident due to the illiquid home equity restrictions. Our analysis also indicates that, with the increase of house price risk and down payment ratio, non-housing consumption of households is reduced in the early life-cycle, and increased in the latter life-cycle.