Willingness to pay for earthquake insurance for rural houses and its influencing factors in Xinjiang, China

Abstract

Enhancing the willingness to pay (WTP) for earthquake insurance for rural houses (EIRH) and transferring earthquake risk is extremely important, especially in the Xinjiang Uygur Autonomous Region (Xinjiang), China, where earthquake disasters frequently occur. Despite the frequent occurrence of such disasters, there is a prevalent low WTP among farmers in Xinjiang. Our research objective was to reveal the reasons of this phenomenon. We explored the intricate relationships between factors that shape the WTP, delving into the perspectives of key stakeholders, including farming households, and the government. This study employed a mixed-methods approach that combines quantitative and qualitative data with binary regression analysis and the control variable approach. The findings indicate that: (1) Willingness to pay is positively correlated with farmers' education level, and it is higher for farmers with poor disaster resistance (aged 40–49 or with incomes below 30,000 RMB). (2) Earthquake risk awareness reveals a positive correlation with WTP, while worry and experience show negative correlations with WTP. (3) The surveyed farming households recognize EIRH as a risk transfer mechanism but heavily rely on government assistance. (4) Notably, an increase in WTP is prominent when government subsidies range from 70% to 90%. (5) Farmers' weak risk awareness, marked by ignorance and distrust of EIRH, calls for strategic interventions. Thus, we recommend that Xinjiang can promote EIRH by adjusting the proportion of subsidies and strengthening the dissemination of disaster risk knowledge.