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

Xueling Bao,Xin Deng,Dingde Xu,Fengwan Zhang

doi:10.3390/agriculture11080783

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.

Highlights

Introduction published maps and institutional affilNatural disasters refer to events in which abnormal changes in nature exceed the tolerance that humans can bear [1,2], resulting in human casualties, property losses, social instability, resource destruction, and other phenomena or a series of injuries to human society and economy, mainly including geophysical disasters and climate-induced disasters [3,4,5,6]
The results provide a reference for the formulation and improvement of a natural disaster insurance policy in disaster-threatened areas based on theory and empirical evidence
The variance inflation factor (VIF) values of all the which indicates that they have good validity

Summary

Introduction

Introduction published maps and institutional affilNatural disasters refer to events in which abnormal changes in nature exceed the tolerance that humans can bear [1,2], resulting in human casualties, property losses, social instability, resource destruction, and other phenomena or a series of injuries to human society and economy, mainly including geophysical disasters (such as earthquakes and volcanoes) and climate-induced disasters (such as floods, storms, and landslides) [3,4,5,6]. Influenced by geology and geomorphology, mountainous areas have been prone to natural disasters since ancient times [15,16]. Their disasters are characterized by chain reactions and mass occurrences [17,18,19,20,21]. China one of the countries with the worst natural disasters in the world [22,23,24].

Methods

Results

Conclusion