Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China
The productivity of the agricultural sector depends on natural resources, and farmers are vulnerable to substantial weather risks globally. For many years, different insurance products have been promoted in China to manage the negative impact and risk associated with unpredictable natural events. Ge...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2022-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2022/8476087 |
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| author | Xinya Guo Yuanfeng Zhao Muhammad Umer Arshad Yufei Gong |
| author_facet | Xinya Guo Yuanfeng Zhao Muhammad Umer Arshad Yufei Gong |
| author_sort | Xinya Guo |
| collection | DOAJ |
| description | The productivity of the agricultural sector depends on natural resources, and farmers are vulnerable to substantial weather risks globally. For many years, different insurance products have been promoted in China to manage the negative impact and risk associated with unpredictable natural events. Generally, different insurance products correspond to the various premium levels, and farmers are unaware of the insurance policies and premium calculations. This study focuses on farmers’ preferences toward the insurance of corn crop, one of China’s largest grain crop productions. This study uses Heckman’s two-stage model to focus on the farmers’ willingness to pay for multiple weather-based insurances, who suffered severe disasters. The contingent valuation method was used to collect the data about farmers’ willingness to pay and preferences from 252 households across three cities of Inner Mongolia, China. The result of empirical estimation indicates that farmers with less experience and high income tend to choose “60% of full-cost insurance product.” Farmers with a lack of specialization and lower diversified planting tend to choose “full-cost insurance product.” In contrast, farmers with higher education prefer “output value insurance product.” The empirical result indicates that the promotion of various agricultural insurance could be a valuable strategy to improve protection levels and manage the risk adjustment input in the agricultural sector. Therefore, this study provides insights into risk reduction design that suggests adopting and encouraging different agricultural insurance products. |
| format | Article |
| id | doaj-art-8972399e927546cfb8501483e424cd48 |
| institution | Kabale University |
| issn | 1607-887X |
| language | English |
| publishDate | 2022-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-8972399e927546cfb8501483e424cd482025-02-03T06:01:25ZengWileyDiscrete Dynamics in Nature and Society1607-887X2022-01-01202210.1155/2022/8476087Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, ChinaXinya Guo0Yuanfeng Zhao1Muhammad Umer Arshad2Yufei Gong3College of Economics and ManagementCollege of Economics and ManagementInner Mongolia Honda College of Arts and ScienceCollege of Economics and ManagementThe productivity of the agricultural sector depends on natural resources, and farmers are vulnerable to substantial weather risks globally. For many years, different insurance products have been promoted in China to manage the negative impact and risk associated with unpredictable natural events. Generally, different insurance products correspond to the various premium levels, and farmers are unaware of the insurance policies and premium calculations. This study focuses on farmers’ preferences toward the insurance of corn crop, one of China’s largest grain crop productions. This study uses Heckman’s two-stage model to focus on the farmers’ willingness to pay for multiple weather-based insurances, who suffered severe disasters. The contingent valuation method was used to collect the data about farmers’ willingness to pay and preferences from 252 households across three cities of Inner Mongolia, China. The result of empirical estimation indicates that farmers with less experience and high income tend to choose “60% of full-cost insurance product.” Farmers with a lack of specialization and lower diversified planting tend to choose “full-cost insurance product.” In contrast, farmers with higher education prefer “output value insurance product.” The empirical result indicates that the promotion of various agricultural insurance could be a valuable strategy to improve protection levels and manage the risk adjustment input in the agricultural sector. Therefore, this study provides insights into risk reduction design that suggests adopting and encouraging different agricultural insurance products.http://dx.doi.org/10.1155/2022/8476087 |
| spellingShingle | Xinya Guo Yuanfeng Zhao Muhammad Umer Arshad Yufei Gong Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China Discrete Dynamics in Nature and Society |
| title | Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China |
| title_full | Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China |
| title_fullStr | Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China |
| title_full_unstemmed | Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China |
| title_short | Farmers’ Willingness to Pay a High Premium for Different Types of Agricultural Insurance: Evidence from Inner Mongolia, China |
| title_sort | farmers willingness to pay a high premium for different types of agricultural insurance evidence from inner mongolia china |
| url | http://dx.doi.org/10.1155/2022/8476087 |
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