The Impact of Individual Heterogeneity on Household Asset Choice: An Empirical Study Based on China Family Panel Studies

In China’s evolving market economy, household asset diversification and refinement have raised concerns about asset selection and rationalization for financial market development. Our research investigates the impact of individual heterogeneity factors, such as the “Big Three” personality traits and cognitive abilities, on household asset allocation behaviors, expanding upon the traditional focus on risky financial assets and the “Big Five” personality traits. We utilize data from the 2018 China Family Panel Studies and employ logistic and hurdle models to examine the breadth of household asset holdings. We utilize two-part models to explore the depth of household asset holdings. Our findings reveal the impact of different personality traits and cognitive abilities on the depth and breadth of different household assets. This study offers a more comprehensive understanding of household asset selection by considering various asset types and individual heterogeneity factors.