Researchers from Chinese Academy of Agricultural Sciences Detail Findings in Agricultural Economics (Risk aversion in crop insurance program purchase…

Researchers from Chinese Academy of Agricultural Sciences Detail Findings in Agricultural Economics (Risk aversion in crop insurance program purchase decisions Evidence from maize production areas in China)

By a News Reporter-Staff News Editor at Obesity, Fitness & Wellness Week -- Investigators discuss new findings in Economics - Agricultural Economics. According to news reporting from Beijing, People's Republic of China, by NewsRx journalists, research stated, "The purpose of this paper is to contribute to the aforementioned literature on the linkage between economic activity and human preference by estimating the cross-sectional determinants of farmers' participation in participation in crop insurance programs (CIPs) and identifying the impediments preventing the remaining farmers from participating. Design/methodology/approach - Using the unique data sets of risk preference experiments and maize producer surveys pertaining to the maize production areas of China, this paper explores the determinants of farmers' CIPs and scrutinizes the role of risk aversion in farmers' CIP purchase decisions under the expected utility maximization framework."

The news correspondents obtained a quote from the research from the Chinese Academy of Agricultural Sciences, "And a 'non-zero threshold probit model' is used for the analysis. The results show that risk aversion plays an important role in CIP purchase decision-making, not only in the form of its direct effect but also with regard to the interaction term and expected loss. Furthermore, if the insured amount is high enough, then risk aversion will no longer affect insurance purchase. Additionally, purchase experience, CIP environment (village purchase ratio), and contract items (insured amounts) are significant determinates in these decisions. There is no significant evidence to suggest that serious adverse selection exists in the sampling areas. Originality/value - One theoretical model is established which considered not only general variables like farmers' production and household information, but also conditions and terms in the insurance policies. The unique experimental method is used to measure farmers' risk aversion."

According to the news reporters, the research concluded: "Both the role of risk aversion and its' interaction terms with others in CIP participation are scrutinized to identify complicated influences under the context of real society."

For more information on this research see: Risk aversion in crop insurance program purchase decisions Evidence from maize production areas in China. China Agricultural Economic Review, 2017;9(1):62-80. China Agricultural Economic Review can be contacted at: Emerald Group Publishing Ltd, Howard House, Wagon Lane, Bingley BD16 1WA, W Yorkshire, England. (Emerald Group Publishing - www.emeraldinsight.com; China Agricultural Economic Review - www.emeraldinsight.com/journals.htm?issn=1756-137X)

Our news journalists report that additional information may be obtained by contacting K.Y. Lyu, Chinese Academy Agr Sci, Inst Agr Econ & Dev, Beijing, People's Republic of China (see also Economics - Agricultural Economics).

Keywords for this news article include: Beijing, People's Republic of China, Asia, Agricultural Economics, Economics, China, Asia, Chinese Academy of Agricultural Sciences.

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