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The impact of weather index insurance on agricultural technology adoption evidence from field economic experiment in China

Yingmei Tang (College of Finance, Nanjing Agricultural University, Nanjing, China)
Yue Yang (College of Finance, Nanjing Agricultural University, Nanjing, China)
Jihong Ge (China Center for Food Security Studies, College of Economics and Management, Nanjing Agricultural University, Nanjing, China)
Jian Chen (The Ohio State University, Columbus, Ohio, USA)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 26 June 2019

Issue publication date: 18 October 2019

952

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

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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