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Factors affecting crop insurance purchases in China: the Inner Mongolia region

Author

Listed:
  • Milton Boyd
  • Jeffrey Pai
  • Qiao Zhang
  • H. Holly Wang
  • Ke Wang

Abstract

Purpose - The purpose of this paper is to explain the factors affecting crop insurance purchases by farmers in Inner Mongolia, China. Design/methodology/approach - A survey of farmers in Inner Mongolia, China, is undertaken. Selected variables are used to explain crop insurance purchases, and a probit regression model is used for the analysis. Findings - Results show that a number of variables explain crop insurance purchases by farmers in Inner Mongolia. Of the eight variables in the model, seven are statistically significant. The eight variables used to explain crop insurance purchases are: knowledge of crop insurance, previous purchases of crop insurance, trust of the crop insurance company, amount of risk taken on by the farmer, importance of low crop insurance premium, government as the main information source for crop insurance, role of head of village, and number of family members working in the city. Research limitations/implications - A possible limitation of the study is that data includes only one geographic area, Inner Mongolia, China, and so results may not always fully generalize to all regions of China, for all situations. Practical implications - Crop insurance has been recently expanded in China, and the information from this study should be useful for insurance companies and government policy makers that are attempting to increase the adoption rate of crop insurance in China. Social implications - Crop insurance may be a useful approach for stabilizing the agricultural sector, and for increasing agricultural production and food security in China. Originality/value - This is the first study to quantitatively model the factors affecting crop insurance purchases by farmers in Inner Mongolia, China.

Suggested Citation

  • Milton Boyd & Jeffrey Pai & Qiao Zhang & H. Holly Wang & Ke Wang, 2011. "Factors affecting crop insurance purchases in China: the Inner Mongolia region," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 3(4), pages 441-450, November.
    • Handle: RePEc:eme:caerpp:v:3:y:2011:i:4:p:441-450
    DOI: 10.1108/17561371111192301
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    References listed on IDEAS

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    1. Vincent H. Smith & Barry K. Goodwin, 1995. "The Economics of Crop Insurance and Disaster Aid," Books, American Enterprise Institute, number 53374, September.
    2. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
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    2. Yuehua Zhang & Ying Cao & H. Holly Wang, 2018. "Cheating? The Case of Producers’ Under‐Reporting Behavior in Hog Insurance in China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 489-510, September.
    3. Gang Chen & Brett Inder & Paula Lorgelly & Bruce Hollingsworth, 2013. "The Cyclical Behaviour Of Public And Private Health Expenditure In China," Health Economics, John Wiley & Sons, Ltd., vol. 22(9), pages 1071-1092, September.
    4. Xiang Luo & Xinhai Lu & Zuo Zhang & Yue Pan, 2020. "Regional differences and rural public expenditure cyclicality: evidence from transitory and persistent shocks in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 281-318, October.
    5. Laura Onofri & Samuele Trestini & Vasco Boatto, 2020. "Who Is Afraid of Biotic Threats? An Econometric Analysis of Veneto Wine Grape Farmers’ Propensity to Insure," Agriculture, MDPI, vol. 10(8), pages 1-9, August.
    6. H. Holly Wang & Lu Liu & David L. Ortega & Yu Jiang & Qiujie Zheng, 2020. "Are smallholder farmers willing to pay for different types of crop insurance? An application of labelled choice experiments to Chinese corn growers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 86-110, January.
    7. K.S. , A. & Khan, T. & Kishore, A., 2018. "Willingness to pay for Weather Based Crop Insurance in Punjab," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277516, International Association of Agricultural Economists.
    8. Shaibu, U.M. & Ibitoye, S.J. & Ibrahim, M.K. & Shaibu, Y.A., 2020. "Modeling the Factors that Influence Farmers’ Participation in Agricultural Insurance Scheme in Kogi State, Nigeria: Implications for Agricultural Policy," Nigerian Agricultural Policy Research Journal (NAPReJ), Agricultural Policy Research Network (APRNet), vol. 7(1), May.
    9. Feng, Shuaizhang & Han, Yujie & Qiu, Huanguang, 2021. "Does crop insurance reduce pesticide usage? Evidence from China," China Economic Review, Elsevier, vol. 69(C).

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