Research On Influence Of Risk Perception And Risk Preference On Farmers’ Forest Insurance Behavior

In the past 30 years,agricultural natural disasters(such as flood,drought,freezing,high temperature,etc.)have increased significantly in China,which directly affect the output and income of agricultural management.Forest insurance can help farmers to disperse natural risks and protect the benefits of forestry management.It is considered as an effective risk management tool to deal with climate change and resist natural disaster risks.The non-profit of forest insurance determines that the development of forest insurance could not do without the support of the government.The central government included the "forest insurance subsidy" into the financial subsidy budget in 2009,and the overall forest insurance premium subsidy showed an upward trend.For example,the proportion of insurance subsidy increased from 81.72% to 89.88% from 2011 to 2017.In 2017,the national forest insurance subsidy premium income was 3.235 billion yuan,and the premium subsidy was as high as 2.907 billion yuan(Forest insurance development report of China,2018).However,there is always a problem in the process of practice that as the main body in purchasing forest insurance,farmers’ effective demand for agricultural insurance is obviously insufficient,and their actual participation rate is also low.Since the risk of forestry natural disasters has a serious negative impact on forestry output and income,why do farmers resist forest insurance? How can the government,insurance companies and relevant forestry departments guide farmers to actively participate in forest insurance effectively? Answering the above questions can not only provide decision-making for farmers in risk management,but also help to improve the ability of forest producers and operators to resist natural risks so that to ensure the sustainable development of forestry and financial system.On the basis of the existing literatures,this paper uses the survey data of 481 households in Fujian,Zhejiang and Liaoning province,which is suppoted by the major research project called investigation on the forestry investment and financing system of farmers of the State Forestry and Grassland Administration in 2018.The data is used to measure the risk perception and risk preference of farmers in forestry natural disasters,and empirically analyzes the impact of farmers’ risk perception and risk preference on willingness to pay premiums and farmers’ Forest Insurance participation behavior,then discusses the adjustment of farmers’ risk perception in the impact relationship.At last,the paper puts forward relevant policy recommendations based on the research results.This study is divided into nine chapters,the core parts are chapter five to chapter eight.(1)Theoretical Analysis.On the basis of Behavioral Economics,Planned Behavior theory,Expected Utility theory and Prospect theory,this paper firstly measures farmers’ risk perception and risk preference by using the Likert scale of psychological paradigm,and analyzes the influencing factors of farmers’ risk perception and risk preference according to the dynamic model of risk perception and related literature research results.Secondly,this paper constructs a model that risk perception and risk preference affect farmers’ willingness to pay forest insurance premium with the aid of IAD extension model.Then this paper studies the relationship between farmers’ willingness to pay for forest insurance premium and the scale of forest land according to the principle of diminishing marginal effect of economics.Finally,the influence mechanism of farmers’ forest insurance insurance insurance behavior is studied according to the Expected Utility theory and Risk Return theory.(2)Empirical analysis.Based on the field survey data of 481 forestland management households in Caoyuan,Hongtian,Dahu counties of Fujian Province,Zhulong,Badu,Yanzhang,Shanglong,Benxi and Fushun counties of Liaoning Province,firstly,the risk perception and risk preference of farmers in forestry natural disasters were measured from two aspects of farmers’ subjective judgment of risk and attitude tendency,and the influencing factors of farmers’ risk perception and risk preference were tested by binary logit model and multivariate ordered logit model.Secondly,the mean comparison method and one-way ANOVA were used to analyze the individual differences in four dimensions of farmers’ risk perception.The accuracy of farmers’ risk perception is evaluated by comparing the deviation between farmers’ risk perception and actual disaster occurrence by measuring the loss coefficient of forestry disaster.Then the spatial dependence of farmers’ risk preference is tested by spatial Doberman model.Thirdly,the effects of risk perception and risk preference on farmers’ willingness to pay forest insurance premium and that under moderate scale of forest land were tested using the method of merged minimum absolute deviation(CLAD).This paper analyzes the moderating role of risk perception on the impact of risk preference affectting farmers’ willingness to pay premium and the corresponding changes in the appropriate scale of forest land by Grouping regression method.Finally,the binary logit model is used to test the impact of risk perception and risk preference on farmers’ forest insurance behavior and the moderating role of risk perception in the relationship between risk preference and farmers’ insurance behavior.According to the forest structure,the samples were divided into public welfare forest farmers and commercial forest farmers.This paper examines the differences of risk perception and risk preference on heterogeneous farmers’ insurance behavior,and the moderating effect of risk perception on heterogeneous farmers’ insurance behavior.The main findings of this study are as follows.Firstly,the proportion of farmers with low perception of forest disaster risk is higher,which is one of the important reasons for the insufficient effective demand and low participation rate of forest insurance.The results showed that the farmers’ perception of fire risk was low,and there was deviation from the actual situation of fire.The farmers’ perception of pest risk was higher,and the deviation was small with the actual occurrence.The level of farmers’ perception of rodent risk was low,which was consistent with the actual occurrence.Secondly,in the forest disaster risk,risk aversion type accounted for the largest proportion of farmers.Farmers’ risk preference has spatial dependence which is affected by individual characteristics,family production and management status,forestry disaster experience and risk communication.Neighboring farmers show similar risk preference by strong dependence on the government,conformity psychology and information exchange between neighbors′.Thirdly,the higher the risk perception and the greater the degree of risk aversion,the higher the willingness of farmers to pay premium is.Farmers’ risk perception moderates risk preference on farmers’ willingness to pay premium.The scale of commercial forest and farmers’ willingness to pay premium presents an inverted "U" structure.Expanding the scale of commercial forest can improve farmers’ willingness to pay premiums.When farmers’ perception of forest disaster risk is high,the more risk averse the farmers is,the stronger his/her willingness to pay premium is.When farmers’ perception of forestry disaster risk is low,the significance of farmers’ willingness to pay premium is affected.Fourthly,farmers with high risk perception and low risk preference are more likely to participate in forest insurance.And risk perception has a negative moderating effect on risk preference affecting farmers’ insurance behavior.Risk perception has a significant positive impact on the insurance behavior of public welfare forest farmers and commercial forest farmers.Risk preference has a negative correlation with the insurance behavior of public welfare forest farmers,but has no significant impact.Risk preference has a significant negative impact on the insurance behavior of commercial forest farmers.Risk perception does not play a moderating role in the influence of risk preference on farmers’ behavior of public welfare forest insurance,but has a significant negative moderating effect on the influence of risk preference on the insurance behavior of commercial forest farmers.Based on the above analysises,the following policy recommendations are put forward.Firstly,strengthen farmers’ experience of forestry disasters,improve risk communication and enhance farmers’ risk perception.Secondly,make use of farmers’ risk aversion psychology to effectively guide farmers to manage forestry disaster risk by participating in forest insurance.Thirdly,promote the moderate scale management of forest land and deepen the forest land right confirmation policy.Fourthly,design different levels of forest insurance to meet farmers’ differentiated needs.The following innovations may exist in this study.Firstly,the existing literature on the willingness and behavior of farmers to participate in forest insurance is usually discussed from the single perspective of risk perception or risk preference.According to the Technology Acceptance model and Planned Behavior theory,risk perception and risk preference have an impact on individual behavior at the same time.Therefore,this paper explores the impact of risk perception and risk preference on farmers’ forest insurance behavior,and scientifically measures farmers’ risk perception and risk preference,analyzes the deviation between farmers’ risk perception and the actual situation of risk,so as to evaluate the accuracy of farmers’ risk perception measurement;Secondly,the existing literatures generally regard individual risk preference as a relatively stable individual tendency,neglecting that the risk preference of adjacent individuals is usually affected by risk communication,thus showing similar risk preference types.This paper uses spatial Durbin model to test the spatial correlation of farmers’ risk preference for forestry natural disasters.The risk preference of farmers in adjacent areas has spatial dependence and tends to be similar risk preference types with the affectting by the government’s "strong dependence" and conformity psychology.Thirdly,the existing literatures take forest farmers as a homogeneous whole,ignoring the differences of heterogeneous farmers’ forest insurance behavior.In this paper,farmers in the survey area are classified into public welfare forest farmers and commercial forest farmers,and the forest insurance behavior of heterogeneous farmers is studied to provide more accurate theoretical basis for adjusting the supply of forest insurance.At the same time,this paper attempts to build a fitting function between the appropriate scale of forest land and farmers’ willingness to pay premium.By calculating the appropriate management plan of forest land,the value of farmers’ willingness to pay premium is simulated and compared with the actual farmers’ payment of premium,so as to explore the reasonable premium standard and provide empirical basis for the scientific formulation of forest insurance policy.