Farmers’ risk aversion, loss aversion and climate change adaptation strategies in Wushen Banner, China

Jianjun Jin, Tong Xuhong, Xinyu Wan, Rui He, Foyuan Kuang and Jing Ning

Journal of Environmental Planning and Management, 2020, vol. 63, issue 14, 2593-2606

Abstract: This study examines the effects of farmers’ risk aversion and loss aversion on their climate change adaptation strategies. Farmers’ risk aversion and loss aversion were elicited using incentive-compatible risk experiments. Face-to-face interviews were conducted to collect information on their climate change adaptation strategies in Wushen Banner in China. The logistic regression analysis results indicated that farmers’ loss aversion is consistently and positively associated with choices across adaptation behaviors, indicating that more loss-averse farmers are more likely to improve irrigation, access to credit and increase rotation. The effects of farmers’ risk aversion on adaptation practices are mixed. Farmers’ risk aversion is negatively and significantly related to adaptation strategies on changing or increasing irrigation, but positively associated with crop diversification, accessing credit, increasing rotation and planting new crop varieties. Other socioeconomic factors, such as farmers’ educational attainment and household income, also have significant and positive effects on farmers’ adaptation practices.

Date: 2020
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DOI: 10.1080/09640568.2020.1742098

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