Farmers’ Social Networks and the Fluctuation in Their Participation in Crop Insurance: The Perspective of Information Diffusion

Tianyuan Luo, Hufeng Yang, Juehang Zhao and Jiaxin Sun

Emerging Markets Finance and Trade, 2020, vol. 56, issue 9, 1-19

Abstract: By investigating the diffusion of information among social networks, and by presenting an analysis of apple growers in terms of the mechanism that underlies insurance decision-making, this paper first examined the relationship between information diffusion in social networks and the volatility that is observed in the crop insurance purchasing rate in China. In accordance with the mean-field theory of social networks, a mathematical model of infectious disease dynamics was employed to construct an insurance purchasing model, and the convergence value of the crop insurance purchasing rate was derived. Second, this paper analyzed research data related to apple insurance, and verified some of the properties related to purchasing rate fluctuations. The results show that the purchasing rate of crop insurance has a unique convergence point. The greater the average degree among the social network, the quicker the crop insurance purchasing rate reached the convergence point, and the lower its volatility.

Date: 2020
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DOI: 10.1080/1540496X.2019.1668774

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