Literature Review on the Wealth Effect in the Stock Market

Main Article Content

Ying Jin
School of Business, Ningbo University, Ningbo 315211, China

DOI: https://doi.org/10.70267//fer.250202.2735

Keywords

stock market, wealth effect, transmission mechanism, consumption behavior

Abstract

On the basis of classic consumption theories such as life cycle theory and the permanent income hypothesis, this paper constructs a comprehensive analysis framework of the wealth effect in the stock market. Through a systematic review of relevant research at home and abroad, the factors that influence the wealth effect, the transmission channels and the differences in their effects in different market environments are discussed. The study revealed that the wealth effect in the stock market has significant regional heterogeneity and structural characteristics and that its transmission efficiency is constrained by the market development stage, investor structure and institutional environment. This study helps to comprehensively understand the association mechanism between financial asset price fluctuations and consumption behavior from the theoretical level and the empirical perspective.

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Published
Jun 25, 2025
Issue
Vol. 2 No. 2 (2025)
Section
Research Articles
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This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Jin, Y. (2025). Literature Review on the Wealth Effect in the Stock Market. Financial Economics Research, 2(2), 26-35. https://doi.org/10.70267//fer.250202.2735

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