Household aging, commercial insurance participation, and risky asset allocation

As populations worldwide continue to age, understanding how demographic transitions influence household financial behavior is increasingly critical for market stability and policy design. However, the complex mechanisms through which aging reshapes investment decisions remain understudied, particularly in emerging markets where financial sector development coincides with rapid demographic shifts. This study examines the impact of household aging on risk asset allocation by analyzing its transmission channels and boundary conditions within Chinese financial markets. The findings reveal that aging influences investment behavior through dual psychological and cognitive pathways (i.e., risk preferences and financial literacy), each exerting a distinct but simultaneous effect. Moreover, commercial insurance participation plays a crucial moderating role across three dimensions: breadth, depth, and density. The heterogeneity analysis highlights systematic variations based on institutional affiliations, geographic locations, and income levels, suggesting that demographic influences on financial decisions are highly context dependent. By integrating lifecycle theory, behavioral finance perspectives, and risk management approaches, this study advances theoretical frameworks and points to the importance of policy responses that enhance risk management tools while addressing both psychological and cognitive barriers, all within the socioeconomic realities of aging societies.