The Impact of Herders’ Risk Attitudes on Livestock Insurance: Evidence from the Pastoral Areas of Tibetan Plateau

Shiqi Guan, Menglin Zhao, Feng Han and Zeng Tang ()
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Shiqi Guan: School of Economics, Central University of Finance and Economics, Beijing 102206, China
Menglin Zhao: State Key Laboratory of Herbage Improvement and Grassland Agro-ecosystems, China Grass Industry Development Strategy Research Center, College of Pastoral Agriculture Science and Technology, Lanzhou University, Lanzhou 730020, China
Feng Han: Development Research Center of National Forestry and Grassland Administration, Beijing 100714, China
Zeng Tang: State Key Laboratory of Herbage Improvement and Grassland Agro-ecosystems, China Grass Industry Development Strategy Research Center, College of Pastoral Agriculture Science and Technology, Lanzhou University, Lanzhou 730020, China

Agriculture, 2024, vol. 14, issue 7, 1-18

Abstract: In the context of advancing the transformation and upgrading of grassland animal husbandry, encouraging and guiding the widespread adoption of livestock insurance plays an important role in promoting the sustainable development of the livestock industry. This paper explores the impact of herders’ attitudes and perceptions towards climate change risks on their livestock insurance strategies. Firstly, experimental economics methods are employed to measure the risk preferences of herders on the Tibetan Plateau. Secondly, a theoretical model incorporating risk preferences and insurance adoption behavior is constructed. Finally, the effects of herders’ risk preferences on insurance adoption behavior are empirically examined through double-hurdle models, instrumental variable models, and moderating effect models. The results reveal that (1) most herders on the Tibetan Plateau exhibit risk-averse characteristics. (2) The degree of risk preference has a significant negative impact on herders’ insurance adoption behavior, while the risk perception significantly positively influences insurance adoption. The results remain valid even after addressing issues of endogeneity and conducting robustness checks. (3) Livestock income plays a crucial moderating role in the mechanism through which risk attitudes affect insurance adoption behavior. (4) The impact of risk preference on insurance adoption behavior shows regional and income heterogeneity.

Keywords: risk preference; livestock insurance; sustainable development of the livestock industry; experimental economics; experimental economics (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
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