Multi-home ownership and household portfolio choice in urban China

This study shows that multi-home ownership determines the patterns of portfolio composition. The IV-Tobit models have been used on the 2015 China household and finance survey data, and the potential endogeneity problem has been addressed by using the variation of housing prices at the city level as instruments. The results show that multiple-housing ownership significantly crowds out the proportion of risky financial assets held by urban Chinese households, which reflects the substitution effect and people's risk awareness with regard to real estate. Moreover, this crowding out effect is particularly significant and generally stronger for wealthy households and for regions with a medium development level of financial markets.