Intergenerational altruism, pessimism bias on tenure insecurity, and sustainable land use: Evidence from household grassland management in China

Abstract

This paper investigates the relationship between intergenerational altruism, pessimism bias, and grassland use among rural households in the pastoral region of northwest China. By designing a series of hypothetical questions, we develop measures of intergenerational altruism and pessimism bias, and examine their impact on actual grazing behavior. Our analysis reveals that households with weaker intergenerational altruism and stronger pessimism bias tend to increase their livestock scale without a corresponding increase in supplementary feeding, suggesting that our measures can serve as reliable predictors of grassland overuse. Furthermore, to investigate whether the grant of long-term land rights to rural households mitigates the negative impact of pessimism bias on grassland management, we employ panel data collected before and after a land reform in China. Our results demonstrate that the reform weakens the adverse effects of pessimism bias and promotes the sustainable use of grassland.