The impact of weather index insurance on agricultural technology adoption evidence from field economic experiment in China
China Agricultural Economic Review
ISSN: 1756-137X
Article publication date: 26 June 2019
Issue publication date: 18 October 2019
Abstract
Purpose
The purpose of this paper is to empirically investigate the impact of weather index insurance on agricultural technology adoption in rural China.
Design/methodology/approach
A field experiment was conducted with 344 rural households/farmers in Heilongjiang and Jiangsu Provinces, China. DID model was used to evaluate farmers’ technology adoption with and without index insurance.
Findings
The results show that weather index insurance has a significant effect on the technology adoption of rural households; there is a regional difference in this effect between Heilongjiang and Jiangsu. Weather index insurance promotes technology adoption of rural households in Heilongjiang, while has limited impact on those in Jiangsu. Weather, planting scale and risk preference are also important factors influencing the technology adoption of rural households.
Research limitations/implications
This research is subject to some limitations. First, the experimental parameters are designed according to the actual situation to simulate reality, but the willingness in the experiment does not mean it will be put into action in reality. Second, due to the diversity of China’s climate, geography and economic environment, rural households are heterogeneous in rural China. Whether the conclusion can be generalized beyond the study area is naturally questionable. A study with more diverse samples is needed to gain a fuller understanding of index insurance’s effects on farmers in China.
Originality/value
This research provides a rigorous empirical analysis on the impact of weather index insurance on farmers’ agricultural technology adoption through a carefully designed field experiment.
Keywords
Acknowledgements
A Project Funded by the Priority Academic Program Development of Jiangsu Higher Education Institutions (PAPD). Humanities and Social Sciences Foundation of the Ministry of Education of China: Supply-demand Decisions and Incentive Mechanism of Pest Control Services: Based on the Perspective of Cleaner Production (18YJA790025). Nanjing Agricultural University Central Universities Fundamental Research Funds for Humanities and Social Sciences (SKCX2015011, SKJD2014001). National Natural Science Foundation Project “The Weather Index Insurance Demand and Its Influence on Farmers’ Behavior Research” (No. 71573129).
Citation
Tang, Y., Yang, Y., Ge, J. and Chen, J. (2019), "The impact of weather index insurance on agricultural technology adoption evidence from field economic experiment in China", China Agricultural Economic Review, Vol. 11 No. 4, pp. 622-641. https://doi.org/10.1108/CAER-05-2018-0107
Publisher
:Emerald Publishing Limited
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