Optimal Life-Cycle Portfolio Choice for Chinese Residents with Housing

Author

Huang, LingLing ; Liu, Zhixin

Author_Institution

Sch. of Econ. & Manage., North China Univ. of Technol., Beijing, China

fYear

2009

fDate

24-26 July 2009

Firstpage

251

Lastpage

255

Abstract

We develop a dynamic realistically model of a typical Chinese resident with stochastic labor income, risky owner-occupied house, housing rental market and costly adjustment in housing of Chinese real estate market, and try to analyze the optimal life-cycle portfolio choice for Chinese residents with housing factors. Our analysis indicates that home ownership crowds out stock investment of Chinese residents. Downpayment ratio and transaction cost of housing crowd out the stockholdings of young homeowners, and have significant impact on residentspsila life-cycle portfolio choice.

Keywords

investment; life cycle costing; optimisation; property market; stochastic processes; Chinese real estate market; Chinese resident; downpayment ratio; housing rental market; optimal life-cycle portfolio choice; risky owner-occupied house; stochastic labor income; stock investment; transaction cost; Conference management; Engineering management; Finance; Financial management; Investments; Portfolios; Predictive models; Risk analysis; Risk management; Technology management; dynamic; housing; optiaml; owning and renting; portfolio choice;

fLanguage

English

Publisher

ieee

Conference_Titel

Business Intelligence and Financial Engineering, 2009. BIFE '09. International Conference on

Conference_Location

Beijing

Print_ISBN

978-0-7695-3705-4

Type

conf

DOI

10.1109/BIFE.2009.65

Filename

5208890