The Effect of Farmers’ Insurance-Adoption Behavior on Input for Beef-Cattle Disease Prevention: Endogenous Switching Regression Model

Liangying Zhang and Yunhua Wu ()
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Liangying Zhang: College of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, China
Yunhua Wu: College of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, China

Agriculture, 2025, vol. 15, issue 6, 1-29

Abstract: This study selects the Inner Mongolia Autonomous Region (IMAR), among the most crucial beef-cattle farming areas in China, to obtain data from the micro-surveys of 447 beef-cattle farmers. Utilizing an endogenous switching regression (ESR) model, this research empirically investigates the effect of farmers’ beef-cattle insurance enrollment behavior on their input of disease prevention. This study finds that farmers adopting beef-cattle insurance reduce beef-cattle disease-prevention input. Based on counterfactual assumptions, if insured farmers had not adopted insurance, their input in disease prevention would increase by 33.45%. Further research confirms that a decrease in the market purchase price of beef cattle enhances the negative effect of farmers’ insured behavior on input for beef-cattle disease prevention. The heterogeneity analysis leads to two more conclusions. One is that insured farmers have the largest reduction in shed-disinfection input, the smallest reduction in voluntary vaccination input, and an intermediate reduction in deworming input. The other is that the act of adopting insurance reduces disease-prevention input to a greater extent for farmers who are far from the core areas of beef-cattle farming or who have not experienced beef-cattle deaths.

Keywords: beef-cattle insurance; disease-prevention input; moral hazard; risk management; endogenous switching regression mode; Inner Mongolia (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: 2025
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