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Article
Publication date: 14 January 2021

Ruojin Zhang, Dan Fan, Gene Lai, Junqian Wu and Jungong Li

Agricultural insurance has become increasingly important to farmers' livelihood and production in rural China. Yet despite the enormous governmental subsidizing efforts, the…

Abstract

Purpose

Agricultural insurance has become increasingly important to farmers' livelihood and production in rural China. Yet despite the enormous governmental subsidizing efforts, the insurance participation rate remains below expectations. This study revisits the linkage between farmers' risk attitudes and crop insurance utilization by providing a cross-cutting perspective such that the role of risk aversion is re-scrutinized in Chinese “kindred” village economies.

Design/methodology/approach

The authors administrated a lottery-based multiple price list (MPL) experiment by recruiting rice farmers from 12 villages in Sichuan province in southwestern China. Using the experimental data, farmers' risk attitudes are assessed and coefficients of risk aversion are estimated within the rank-dependent expected utility (RDEU) framework by maximizing a structured likelihood function.

Findings

This study provides substantiating evidence that rice farmers in southwestern China exhibit relatively high risk aversion. The authors also provide suggestive evidence of the positive relationship between farmers' risk aversion and crop insurance utilization. In addition, findings reveal that kinship network has a negative effect on crop insurance utilization, such that farmers who are connected in higher degree of kinship network have lower likelihood of crop insurance utilization, which suggests that kinship network may be substitute for formal crop insurance. Result also demonstrates that the incentive effect of risk aversion on farmers' crop insurance participation manifests differently depending on the degree of kinship network in rural China.

Originality/value

This study provides a cross-cutting perspective by scrutinizing the effects of farmers' risk attitudes and kinship network on crop insurance participation in rural China, which has received relatively little attention in the literature. Conclusions on the effects of risk aversion on crop insurance participation have been mixed in previous studies. In addition, to the best of our knowledge, little has been done to explicitly examine the influence of social proximity and networks on farmers' insurance uptake. This study attempts to fill both gaps. This study provides new insights which might shed lights on the understanding of farmers' crop insurance participation in rural China.

Details

Agricultural Finance Review, vol. 81 no. 5
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 9 September 2022

Shaoze Jin, Xiangping Jia and Harvey S. James

This paper aims to explore the relationship between prudence in risk attitudes and patience of time preference of Chinese apple growers regarding off-farm cold storage of…

Abstract

Purpose

This paper aims to explore the relationship between prudence in risk attitudes and patience of time preference of Chinese apple growers regarding off-farm cold storage of production and marketing in non-harvest seasons. The authors also consider the effect of farmer participation in cooperative-like organizations known as Farm Bases (FBs).

Design/methodology/approach

The authors use multiple list methods and elicitation strategies to measure Chinese apple farmers' risk attitudes and time preferences. Because these farmers can either sell their apples immediately to supermarkets or intermediaries or place them in storage, the authors assess correlations between their storage decisions and their preferences regarding risk and time. The authors also differentiate risks involving gains and losses and empirically examine individual risk attitudes in different scenarios.

Findings

Marketing decisions are moderately associated with risk attitudes but not time preference. Farmers with memberships in local farmer cooperatives are likely to speculate more in cold storage. Thus, risk aversion behavioral and psychological motives affect farmers' decision-making of cold storage and intertemporal marketing activities. However, membership in cooperatives does not always result in improved income and welfare for farmers.

Research limitations/implications

The research confirms that behavioral factors may strongly drive vulnerable smallholder farmers to speculate into storage even under seasonal and uncertain marketing volatility. There is the need to think deeper about the rationale of promoting cooperatives and other agricultural forms, because imposing these without careful consideration can have negative impacts.

Originality/value

Do risk and time preferences affect the decision of farmers to utilize storage facilities? This question is important because it is not clear if and how risk preferences affect the tradeoff between consuming today and saving for tomorrow, especially for farmers in developing countries.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 14 no. 2
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 21 February 2020

Giuseppina Migliore, Alkis Thrassou, Maria Crescimanno, Giorgio Schifani and Antonino Galati

The aim of this study is to understand which wine quality characteristics, consumers' attitudes and socio-demographic characteristics affect the consumers' willingness to pay…

1503

Abstract

Purpose

The aim of this study is to understand which wine quality characteristics, consumers' attitudes and socio-demographic characteristics affect the consumers' willingness to pay (WTP) a premium price for a bottle of natural wine.

Design/methodology/approach

The research is experimental and investigated the purchasing intentions of 613 Italian wine consumers within a hypothetical setting. In order to elicit WTP for natural wine, a multiple price list (MPL) in a comparison with one bottle of conventional wine, with an average price of €5 was adopted. To understand which quality attributes of wine affect the consumers' WTP for natural wine, a Tobit regression model was implemented.

Findings

The findings reveal that drink frequency and occasion, organic production method, the content of sulfites, income and the attitudes towards healthy eating and the environment are positively associated with a higher WTP for natural wine.

Research limitations/implications

The main limitation of this study is related to both the convenient sample and the limited geographical area. However, identifying which quality attributes of natural wine are most appreciated by consumers and which attitudes affect this behaviour is fundamental in order to develop successful marketing strategies for product development and the design of advertising and communication campaigns.

Originality/value

This study is one of the first to analyse the consumer behaviour towards natural wines contributing to enrich that part of the economic literature which states that consumers have a positive attitude towards sustainable wines.

Article
Publication date: 23 August 2023

Achilleas Vassilopoulos, Lydia Papadaki and Phoebe Koundouri

Storytelling through virtual reality (VR) combines the strengths of cutting-edge technology with traditional informational campaigns. As a tool for climate change mitigation, VR…

Abstract

Purpose

Storytelling through virtual reality (VR) combines the strengths of cutting-edge technology with traditional informational campaigns. As a tool for climate change mitigation, VR has been shown to educate individuals and stimulate both emotional and cognitive responses that promote pro-environmental behavior. This paper aims to investigate whether these benefits extend to the field of green investing through an experiment conducted with a sample of small business entrepreneurs.

Design/methodology/approach

The experimental design involved making choices between bonds varying in maturity dates, annual interest and environmental classification (regular versus green). To identify potential impacts of the immersive experience on investment decisions, these choices were made both before and after exposure to VR videos illustrating the devastating effects of climate change. A multiple price list was employed to elicit subjects' risk preferences, enabling the joint estimation of the treatment effect and the risk and time preference parameters.

Findings

The findings indicate that, when risk and time preference parameters are controlled for, a VR experience can nudge toward green investment choices. This effect is more profound among those who already exhibit a greater propensity to opt for green investments.

Originality/value

Previous research shows that negative emotions, such as guilt, affect pro-environmental intentions, as well as actions, while message vividness through immersive experiences is effective in nudging greener behavior. Since analogous results in the framework of financial investments are not currently available, this paper seeks to test whether VR videos depicting the adverse effects of climate change can generate negative emotions associated with experiencing these effects and make them salient in subsequent investment decisions made by small business entrepreneurs.

Details

Review of Behavioral Finance, vol. 16 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 1 September 1967

THE need to increase the productivity of British industry is a common topic and when it is discussed the more economic use of manpower is inevitably raised. What is often lost…

Abstract

THE need to increase the productivity of British industry is a common topic and when it is discussed the more economic use of manpower is inevitably raised. What is often lost sight of is the fact that future gains of productivity will be derived, as they were in the past, from a wider use of better machines rather than from more intensive effort by human beings. Such machines are expensive. Some of them, like the sophisticated machine tools described by the grandiose name of ‘machining centres’, are extremely costly.

Details

Work Study, vol. 16 no. 9
Type: Research Article
ISSN: 0043-8022

Article
Publication date: 15 February 2019

Yuxia Ouyang and Amit Sharma

The purpose of this study was to investigate the preference of health-warning message labeling in an eating-away-from-home context. The authors assessed individuals’ preference…

Abstract

Purpose

The purpose of this study was to investigate the preference of health-warning message labeling in an eating-away-from-home context. The authors assessed individuals’ preference valuation of such messaging from a dual – consumer and citizen – perspective and with associated expected risk reduction (RR) level.

Design/methodology/approach

In an online stated choice experiment on Amazon’s Mechanical Turk (N = 658), participants were asked to provide willingness to pay (WTP) preferences for health-warning messages and based on the expected RR from health-warning messages. Two types of multiple price list questions were used for consumer and citizen contexts. Interval regression and descriptive analysis methods were applied to analyze the data.

Findings

The study found that individuals placed a higher value (higher WTP) on health-warning message labeling when acting as citizens rather than as consumers. An RR expectation of 50 per cent was most effective in increasing participants’ WTP. Individuals who ate out frequently were more concerned about healthier food messages, and the influence of gender and age on WTP was conditional on individuals’ roles as consumers versus citizens.

Originality/value

This study extends the theory of consumer-citizen duality to the context of health-related information labeling, thus opening the discussion to extending such labeling from traditionally risky behavior such as alcohol and tobacco to also including food choice behavior. The authors also highlight implications on policy and industry practices to promote healthy food choices through such messages.

Details

International Journal of Contemporary Hospitality Management, vol. 31 no. 2
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 27 March 2020

Alisa Frik and Alexia Gaudeul

Many online transactions and digital services depend on consumers’ willingness to take privacy risks, such as when shopping online, joining social networks, using online banking…

Abstract

Purpose

Many online transactions and digital services depend on consumers’ willingness to take privacy risks, such as when shopping online, joining social networks, using online banking or interacting with e-health platforms. Their decisions depend on not only how much they would suffer if their data were revealed but also how uncomfortable they feel about taking such a risk. Such an aversion to risk is a neglected factor when evaluating the value of privacy. The aim of this paper is to propose an empirical method to measure both privacy risk aversion and privacy worth and how those affect privacy decisions.

Design/methodology/approach

The authors let individuals play privacy lotteries and derive a measure of the value of privacy under risk (VPR) and empirically test the validity of this measure in a laboratory experiment with 148 participants. Individuals were asked to make a series of incentivized decisions on whether to incur the risk of revealing private information to other participants.

Findings

The results confirm that the willingness to incur a privacy risk is driven by a complex array of factors, including risk aversion, self-reported value for private information and general attitudes to privacy (derived from surveys). The VPR does not depend on whether there is a preexisting threat to privacy. The authors find qualified support for the existence of an order effect, whereby presenting financial choices prior to privacy ones leads to less concern for privacy.

Practical implications

Attitude to risk in the domain of privacy decisions is largely understudied. In this paper, the authors take a first step toward closing this empirical and methodological gap by offering (and validating) a method for the incentivized elicitation of the implicit VPR and proposing a robust and meaningful monetary measure of the level of aversion to privacy risks. This measure is a crucial step in designing and implementing the practical strategies for evaluating privacy as a competitive advantage and designing markets for privacy risk regulations (e.g. through cyber insurances).

Social implications

The present study advances research on the economics of consumer privacy – one of the most controversial topics in the digital age. In light of the proliferation of privacy regulations, the mentioned method for measuring the VPR provides an important instrument for policymakers’ informed decisions regarding what tradeoffs consumers consider beneficial and fair and where to draw the line for violations of consumers’ expectations, preferences and welfare.

Originality/value

The authors present a novel method to measure the VPR that takes account of both the value of private information to consumers and their tolerance for privacy risks. The authors explain how this method can be used more generally to elicit attitudes to a wide range of privacy risks involving exposure of various types of private information.

Details

Journal of Consumer Marketing, vol. 37 no. 4
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 1 March 1973

A BODY known as the Local Government Personnel and Management Services Group has been moved to issue a short paper commenting on the Bains Report issued by the Bains Committee to…

Abstract

A BODY known as the Local Government Personnel and Management Services Group has been moved to issue a short paper commenting on the Bains Report issued by the Bains Committee to which the Group submitted evidence.

Details

Work Study, vol. 22 no. 3
Type: Research Article
ISSN: 0043-8022

Open Access
Article
Publication date: 28 July 2023

Sergio Almeida

This study aims to examine the effects of prior small-scale changes to wealth on subsequent risky choices.

Abstract

Purpose

This study aims to examine the effects of prior small-scale changes to wealth on subsequent risky choices.

Design/methodology/approach

The paper opted for a laboratory experiment in which subjects perform two sequences of risky tasks. In between these two sets, the author transfers money for real for a randomly selected half of the subjects. Data on choices before and after the transfer of money are used to estimate risk attitudes and analyze whether the transfer of money affected attitudes to risk.

Findings

The author finds that the money gain does not change subjects' risk preferences – neither in a within- nor in a between-subject design. This suggests that individuals' risky choices are consistent with their constant absolute (CARA) risk aversion preferences, a result that supports a key assumption in recent literature on the calibration critique of decision theories and the view that individuals engage in narrow framing.

Research limitations/implications

Because of the relatively small transfer of money, the research results may lack generalizability.

Practical implications

The paper includes implications for the reference-dependent and other theories that explain how prior outcomes affect risk-taking behavior in sequential problems.

Social implications

The results are relevant to the research community studying risk-taking behavior as the results shed new light on a well-known result put forward by a seminal paper by Thaler.

Originality/value

This paper fills in an identified gap in the literature which is the need to test the house-money effect in a more realistic setting (over repeated risk-elicitation tasks, with money given outside the lotteries and in a within-subject design).

Details

EconomiA, vol. 24 no. 2
Type: Research Article
ISSN: 1517-7580

Keywords

Open Access
Article
Publication date: 9 June 2023

Marco Santorsola, Rocco Caferra and Andrea Morone

Expanding on the real-world financial market framework and considering the current market turmoil, with cryptocurrencies (where contracts for difference (CFDs) are extremely…

Abstract

Purpose

Expanding on the real-world financial market framework and considering the current market turmoil, with cryptocurrencies (where contracts for difference (CFDs) are extremely common) (Hasso et al., 2019) displaying unprecedented volatility, the authors aim to test in an online laboratory setting whether displaying a risk warning message is truly effective in reducing the level of risk taken and whether the placement of this method makes a difference.

Design/methodology/approach

To explore the impact of risk disclosure framing on risk-taking behavior, the authors conducted an online pair-wise lottery choice experiment. In addition to manipulating risk awareness through the presence or absence of risk warning messages of varying intensity, the authors also considered dynamic inconsistency, cognitive ability and questionnaire-based financial risk tolerance (FRT) scores. The authors aimed to identify potential relationships between these variables and experimentally elicited risk aversion. The authors' study offers valuable insights into the complex nature of risky decision-making and sheds light on the importance of considering dynamic inconsistency in addition to risk awareness and aversion.

Findings

The authors' results provide statistical evidence for the efficacy of informative and very salient messages in mitigating risky decision, hinting at several policy implications. The authors also provide some statistical evidence in support of the relationship between cognitive abilities and risk preferences. The authors detect that individual with low cognitive abilities scores display great risk aversion.

Originality/value

This study investigates the impact of risk warning messages on investment decisions in an online laboratory setting – a unique approach. However, the authors go beyond this and also examine the potential influence of dynamic inconsistency on decision-making, adding further value to the literature on this topic. To ensure a comprehensive understanding of the participants, the authors collect data on cognitive ability and FRT using questionnaires. This study provides a simple and cost-effective framework that can be easily replicated in future research – a valuable contribution to the field.

Details

Journal of Economic Studies, vol. 51 no. 9
Type: Research Article
ISSN: 0144-3585

Keywords

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