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Does disaster shocks affect farmers’ willingness for insurance? Mediating effect of risk perception and survey data from risk-prone areas in East China

Author

Listed:
  • Ruikun Peng

    (Shandong Agricultural University)

  • Yinyin Zhao

    (Nanjing University of Information Science and Technology)

  • Ehsan Elahi

    (Shandong University of Technology)

  • Benhong Peng

    (Nanjing University of Information Science and Technology)

Abstract

The study estimates the impact of disaster shocks and risk perception on farmers’ willingness for insurance. Based on data of 328 farmers from the Shandong province of East China, the study uses cluster analysis, analysis of variance, hierarchical linear model and structural equation model to determine the impact of disaster shocks and risk perception on farmers’ willingness for insurance. A bootstrap method of bias correction was used to test the mediating effect of risk perception between disaster shocks and insurance willingness. Results revealed that the overall willingness of farmers for crop insurance was low. However, the farmers’ willingness for crop insurance increased with an increase in disaster shocks and risk perception. The parametric analysis also confirmed that disaster shocks and risk perceptions have a significant and positive impact on the farmers’ willingness for crop insurance. Risk perception has a partial mediating effect between disaster shock and farmers’ willingness for crop insurance. It indicates that disaster shock not only impacts on farmers’ willingness for crop insurance directly but also has an indirect impact on farmers’ willingness for crop insurance through risk perception. Farmers are encouraged to participate in the early warning disaster programs to increase awareness of climate change and resilience against weather aberrations.

Suggested Citation

  • Ruikun Peng & Yinyin Zhao & Ehsan Elahi & Benhong Peng, 2021. "Does disaster shocks affect farmers’ willingness for insurance? Mediating effect of risk perception and survey data from risk-prone areas in East China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 106(3), pages 2883-2899, April.
    • Handle: RePEc:spr:nathaz:v:106:y:2021:i:3:d:10.1007_s11069-021-04569-0
    DOI: 10.1007/s11069-021-04569-0
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    Cited by:

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    2. Shi-yu Hu & Miao Yu & Ting Que & Gang Fan & Hui-ge Xing, 2022. "Individual willingness to prepare for disasters in a geological hazard risk area: an empirical study based on the protection motivation theory," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(3), pages 2087-2111, February.

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