The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy
China has invested substantial financial subsidies to promote the development of crop insurance; however, the insurance demand among farmers remains notably low, resulting in significant welfare loss. Based on a field survey conducted in 2021 in seven major grain-producing counties in Jiangsu Provin...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2024-11-01
|
| Series: | Agriculture |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2077-0472/14/11/2050 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850217325852098560 |
|---|---|
| author | Mingyu Hu Fujin Yi Hong Zhou Feier Yan |
| author_facet | Mingyu Hu Fujin Yi Hong Zhou Feier Yan |
| author_sort | Mingyu Hu |
| collection | DOAJ |
| description | China has invested substantial financial subsidies to promote the development of crop insurance; however, the insurance demand among farmers remains notably low, resulting in significant welfare loss. Based on a field survey conducted in 2021 in seven major grain-producing counties in Jiangsu Province, this study analyses the relationship between premium subsidy rates and the welfare effects of subsidies through theoretical model derivation and explores the impact of farmer heterogeneity on the results. This study innovatively introduces a power law distribution model to elucidate the distributional characteristics of farmers’ crop insurance demand, demonstrates the significant limitations of the linear demand model in welfare research, and effectively analyzes the welfare effects of China’s current crop insurance premium subsidy policy. The results indicate that: (1) the actual crop insurance demand of farmers aligns more closely with a power law distribution, and its long-tailed characteristics refute the assumption of linear distribution; (2) there exists an inverted “U”-shaped relationship between the subsidy ratio and the welfare effect, and an excessively high subsidy ratio produces substantial unnecessary losses; (3) variations in welfare effects exist among farmers in different regions, risk attitudes, and cultivation scales, but the range of differences between groups is limited. |
| format | Article |
| id | doaj-art-4191c023bece4e3d9fcaa028f021870a |
| institution | OA Journals |
| issn | 2077-0472 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Agriculture |
| spelling | doaj-art-4191c023bece4e3d9fcaa028f021870a2025-08-20T02:08:04ZengMDPI AGAgriculture2077-04722024-11-011411205010.3390/agriculture14112050The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium SubsidyMingyu Hu0Fujin Yi1Hong Zhou2Feier Yan3College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, ChinaCollege of Economics and Management, Nanjing Agricultural University, Nanjing 210095, ChinaCollege of Economics and Management, Nanjing Agricultural University, Nanjing 210095, ChinaCollege of Economics and Management, Nanjing Agricultural University, Nanjing 210095, ChinaChina has invested substantial financial subsidies to promote the development of crop insurance; however, the insurance demand among farmers remains notably low, resulting in significant welfare loss. Based on a field survey conducted in 2021 in seven major grain-producing counties in Jiangsu Province, this study analyses the relationship between premium subsidy rates and the welfare effects of subsidies through theoretical model derivation and explores the impact of farmer heterogeneity on the results. This study innovatively introduces a power law distribution model to elucidate the distributional characteristics of farmers’ crop insurance demand, demonstrates the significant limitations of the linear demand model in welfare research, and effectively analyzes the welfare effects of China’s current crop insurance premium subsidy policy. The results indicate that: (1) the actual crop insurance demand of farmers aligns more closely with a power law distribution, and its long-tailed characteristics refute the assumption of linear distribution; (2) there exists an inverted “U”-shaped relationship between the subsidy ratio and the welfare effect, and an excessively high subsidy ratio produces substantial unnecessary losses; (3) variations in welfare effects exist among farmers in different regions, risk attitudes, and cultivation scales, but the range of differences between groups is limited.https://www.mdpi.com/2077-0472/14/11/2050crop insurancepower-law demandpremium subsidywelfare effect |
| spellingShingle | Mingyu Hu Fujin Yi Hong Zhou Feier Yan The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy Agriculture crop insurance power-law demand premium subsidy welfare effect |
| title | The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy |
| title_full | The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy |
| title_fullStr | The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy |
| title_full_unstemmed | The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy |
| title_short | The More the Better? Reconsidering the Welfare Effect of Crop Insurance Premium Subsidy |
| title_sort | more the better reconsidering the welfare effect of crop insurance premium subsidy |
| topic | crop insurance power-law demand premium subsidy welfare effect |
| url | https://www.mdpi.com/2077-0472/14/11/2050 |
| work_keys_str_mv | AT mingyuhu themorethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT fujinyi themorethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT hongzhou themorethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT feieryan themorethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT mingyuhu morethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT fujinyi morethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT hongzhou morethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy AT feieryan morethebetterreconsideringthewelfareeffectofcropinsurancepremiumsubsidy |