Can Trust Motivate Farmers to Purchase Natural Disaster Insurance? Evidence from Earthquake-Stricken Areas of Sichuan, China

Abstract

Natural disasters cause great losses of property and life in many areas of China. However, rural residents do not always insure themselves against these losses. Measuring the correlation between trust and farmers’ behavior related to the purchasing of natural disaster insurance is of great significance to the implementation of natural disaster insurance pilot programs and insurance systems in China. This article analyzes data from a survey of 327 households in four districts and counties of Sichuan Province, China, that were affected by the Wenchuan and Lushan earthquakes. According to the relevant theories of trust, trust was divided into three dimensions: authority trust, collective trust, and relationship trust. Then a technology acceptance model was built, and PLS-SEM was used to comprehensively analyze the correlation between different dimensions of trust and farmers’ insurance purchase behavior. The results show that (1) only relationship trust was directly and significantly positively correlated with insurance purchasing behavior. Although there was no direct significant correlation between authoritative trust or collective trust and buying behavior, relationship trust was found to indirectly affect buying behavior. (2) Younger farmers and those with higher incomes are more likely to buy disaster insurance if they live in a disaster-threat zone, have experienced disasters, and are risk averse. We then discuss the correlations between farmers’ trust and natural disaster insurance purchasing in areas threatened by earthquake disasters. This provides a policy inspiration for the promotion of disaster insurance and the construction of insurance systems in China.

Livelihood Capital Effects on Famers’ Strategy Choices in Flood-Prone Areas—A Study in Rural China

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Evaluating impacts from natural weather-related disasters on farmers mental health worldwide

“…Young farmers or farmers with higher incomes are more likely to buy disaster insurance due to previous disaster experiences, feelings about disasters, or where they reside (Bao et al, 2021). A study indicated how younger farmers experiencing financial hardship and residing in remote areas are more likely to experience drought-related stress (Austin et al, 2018).…”

Impact and mechanism of rural labor migration on forest management income: Evidence from the Jiangxi Province, China

“…For regional heterogeneity analysis, the study used the topographic data of the village where the sample households resided (Type) and the ages of the household heads as control variables (Age). Based on previous research studies and the actual situation of the study areas, we also chose family characteristic factors (education of household head (Edu), the number of laborers in a household (Labor), whether family members are village cadres (Vcadres), forest resource factors (timber forest area (Timber_A), economic forest area (Economic_A), bamboo forest area (Bamboo_A), and forest fragmentation (Areatract)), economic and geographical factors (village population (V_pop), per capita net income in the village (V_income), and the distance from village to nearby town (Distance)) (Bao et al, 2021;Lian et al, 2021;Wang et al, 2021;Liu et al, 2022).…”