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Portfolio choice over the life-cycle for Chinese residents with risky housing

  • Ling Ling Huang*
  • , Zhi Xin Liu
  • *Corresponding author for this work
  • North China University of Technology

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

We develop a dynamic realistically calibrated life-cycle model to study the optimal portfolio choice for Chinese families with risky housing. We try to find the relationships between household asset allocation and its housing decision, and the effect of housing transaction cost, housing price incremental rate and the lowest level of housing. Our analysis demonstrates that the home ownership rate and housing position are hump-shaped during life-cycle. It means that some households may optimal choose to sell their house, and become renters again at the latter stage of life-cycle. Our analysis also indicate that housing transaction cost crowds out of stockholdings because of protective saving, and housing price incremental rate and the lowest level of housing reduces stockholdings due to the illiquid home equity restrictions.

Original languageEnglish
Title of host publication2009 International Conference on Management Science and Engineering - 16th Annual Conference Proceedings, ICMSE 2009
Pages956-962
Number of pages7
DOIs
StatePublished - 2009
Event2009 16th International Conference on Management Science and Engineering, ICMSE 2009 - Moscow, Russian Federation
Duration: 14 Sep 200916 Sep 2009

Publication series

Name2009 International Conference on Management Science and Engineering - 16th Annual Conference Proceedings, ICMSE 2009

Conference

Conference2009 16th International Conference on Management Science and Engineering, ICMSE 2009
Country/TerritoryRussian Federation
CityMoscow
Period14/09/0916/09/09

Keywords

  • Housing
  • Life-cycle
  • Optimal
  • Portfolio choice

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