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Farmers’ Risk Preferences in Rural China: Measurements and Determinants

Author

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  • Jianjun Jin

    (State Key Laboratory of Earth Surface Processes and Resource Ecology, Beijing Normal University, Beijing 100875, China
    Faculty of Geographical Sciences, Beijing Normal University, Beijing 100875, China)

  • Rui He

    (Faculty of Geographical Sciences, Beijing Normal University, Beijing 100875, China)

  • Haozhou Gong

    (Faculty of Geographical Sciences, Beijing Normal University, Beijing 100875, China)

  • Xia Xu

    (State Key Laboratory of Earth Surface Processes and Resource Ecology, Beijing Normal University, Beijing 100875, China)

  • Chunyang He

    (State Key Laboratory of Earth Surface Processes and Resource Ecology, Beijing Normal University, Beijing 100875, China)

Abstract

This study measures farmers’ risk attitudes in rural China using a survey instrument and a complementary experiment conducted in the field with the same sample of subjects. Using a question asking people about their willingness to take risks “in general”, we found that the average response of our sample is slightly risk averse. Farmers’ exogenous factors (age, gender, and height) and self-reported happiness have a significant impact on farmers’ willingness to take risks. The experiment results show that approximately 44% of farmers in the study area are risk averse. We compare farmers’ self-reported measures of risk preferences derived from the survey instrument to preferences elicited through the experimental task. Results show that answers to the general risk attitude question in the survey can predict farmers’ behaviors in the experiment to a statistically significant degree. This paper can contribute to the empirical literature on comparing local farmers’ risk attitudes across different risk preference measurement methods in the developing world.

Suggested Citation

  • Jianjun Jin & Rui He & Haozhou Gong & Xia Xu & Chunyang He, 2017. "Farmers’ Risk Preferences in Rural China: Measurements and Determinants," IJERPH, MDPI, vol. 14(7), pages 1-11, June.
    • Handle: RePEc:gam:jijerp:v:14:y:2017:i:7:p:713-:d:103177
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    References listed on IDEAS

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