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

Milton Boyd (Department of Agribusiness & Agricultural Economics, University of Manitoba, Winnipeg, Canada and Warren Centre for Actuarial Studies & Research, University of Manitoba, Winnipeg, Canada)
Jeffrey Pai (Warren Centre for Actuarial Studies & Research, University of Manitoba, Winnipeg, Canada)
Qiao Zhang (Agricultural Information Institute of Chinese Academy of Agricultural Science, Beijing, People's Republic of China and Key Laboratory of Digital Agricultural Early‐Warning Technology of Ministry of Agriculture of China, Beijing, People's Republic of China)
H. Holly Wang (Department of Agricultural Economics, Purdue University, West Lafayette, Indiana, USA)
Ke Wang (Agricultural Information Institute of Chinese Academy of Agricultural Science, Beijing, People's Republic of China and Key Laboratory of Digital Agricultural Early‐Warning Technology of Ministry of Agriculture of China, Beijing, People's Republic of China)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 22 November 2011

1495

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.

Keywords

Citation

Boyd, M., Pai, J., Zhang, Q., Holly Wang, H. and Wang, K. (2011), "Factors affecting crop insurance purchases in China: the Inner Mongolia region", China Agricultural Economic Review, Vol. 3 No. 4, pp. 441-450. https://doi.org/10.1108/17561371111192301

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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