Risk, ambiguity and willingness to participate in crop insurance programs: Evidence from a field experiment
This paper analyses smallholder farmers’ willingness to participate in crop insurance programs, using recent data from cocoa farmers in Ghana. Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to analyse how risk and ambiguit...
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| Veröffentlicht in: | The Australian journal of agricultural and resource economics 2021-07, Vol.65 (3), p.679-703 |
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| container_title | The Australian journal of agricultural and resource economics |
| container_volume | 65 |
| creator | Ali, Williams Abdulai, Awudu Goetz, Renan Owusu, Victor |
| description | This paper analyses smallholder farmers’ willingness to participate in crop insurance programs, using recent data from cocoa farmers in Ghana. Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to analyse how risk and ambiguity aversion, and liquidity constraints influence farmers’ crop insurance participation decisions. We employ field experiments to elicit farmers’ ambiguity and risk aversion, the stated preference approach to obtain information on farmers’ willingness to participate in crop insurance programs, and a discrete choice model to examine the factors that influence their participation decisions. We find that risk preferences, ambiguity aversion, and liquidity constraints influence farmers’ willingness to participate in crop insurance programs. The results also reveal that the probability of participating in crop insurance programs is positively influenced by wealth, trust and education of the farmers. |
| doi_str_mv | 10.1111/1467-8489.12434 |
| format | Article |
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Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to analyse how risk and ambiguity aversion, and liquidity constraints influence farmers’ crop insurance participation decisions. We employ field experiments to elicit farmers’ ambiguity and risk aversion, the stated preference approach to obtain information on farmers’ willingness to participate in crop insurance programs, and a discrete choice model to examine the factors that influence their participation decisions. We find that risk preferences, ambiguity aversion, and liquidity constraints influence farmers’ willingness to participate in crop insurance programs. The results also reveal that the probability of participating in crop insurance programs is positively influenced by wealth, trust and education of the farmers.</description><identifier>ISSN: 1467-8489</identifier><identifier>ISSN: 1364-985X</identifier><identifier>EISSN: 1467-8489</identifier><identifier>DOI: 10.1111/1467-8489.12434</identifier><language>eng</language><publisher>Hoboken, NJ: Wiley</publisher><subject>Ambiguity ; ambiguity aversion ; Aversion ; Cocoa ; Crop insurance ; Crops ; Decision making models ; Decisions ; Discrete choice ; Farmers ; field experiments ; Field tests ; Insurance ; Liquidity ; liquidity constraints ; Risk ; Risk analysis ; Risk aversion ; Risk preferences ; Small farms ; Uncertainty ; Wealth ; Willingness</subject><ispartof>The Australian journal of agricultural and resource economics, 2021-07, Vol.65 (3), p.679-703</ispartof><rights>2021 The Authors. 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Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to analyse how risk and ambiguity aversion, and liquidity constraints influence farmers’ crop insurance participation decisions. We employ field experiments to elicit farmers’ ambiguity and risk aversion, the stated preference approach to obtain information on farmers’ willingness to participate in crop insurance programs, and a discrete choice model to examine the factors that influence their participation decisions. We find that risk preferences, ambiguity aversion, and liquidity constraints influence farmers’ willingness to participate in crop insurance programs. The results also reveal that the probability of participating in crop insurance programs is positively influenced by wealth, trust and education of the farmers.</description><subject>Ambiguity</subject><subject>ambiguity aversion</subject><subject>Aversion</subject><subject>Cocoa</subject><subject>Crop insurance</subject><subject>Crops</subject><subject>Decision making models</subject><subject>Decisions</subject><subject>Discrete choice</subject><subject>Farmers</subject><subject>field experiments</subject><subject>Field tests</subject><subject>Insurance</subject><subject>Liquidity</subject><subject>liquidity constraints</subject><subject>Risk</subject><subject>Risk analysis</subject><subject>Risk aversion</subject><subject>Risk preferences</subject><subject>Small farms</subject><subject>Uncertainty</subject><subject>Wealth</subject><subject>Willingness</subject><issn>1467-8489</issn><issn>1364-985X</issn><issn>1467-8489</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2021</creationdate><recordtype>article</recordtype><sourceid>24P</sourceid><sourceid>WIN</sourceid><recordid>eNqFkN1LwzAUxYsoOKfPPgkBX-1M0rRpfBtjfjEQhj6H2zQd2fpl0qr7702tim_m5YTLObknvyA4J3hG_LkmLOFhylIxI5RF7CCY_E4O_9yPgxPnthhjyhI6CXZr43ZXCKrMbHrT7RHUOXo3ZWnqTa2dQ12DWrCdUaaFTiNTI2Wb1qvrLdRKo9Y2GwuVu0HLN5PrYVTYpkKACqPLHOmPVltT6bo7DY4KKJ0--9Zp8HK7fF7ch6unu4fFfBUq5quHMSjMkkLxnCZ5xnUWR8CBiowBMJYoBikmAnOIYxC55kSrOOFciAIXTOQkmgaX47u-2muvXSe3TW9rv1LSOMYkpUQMruvR5f_jnNWFbH1NsHtJsByIyoGZHJjJL6I-kYwJz0fv_7PL-eN8_RO8GINaNbVxchDXNVZShgWLok-MSoMh</recordid><startdate>202107</startdate><enddate>202107</enddate><creator>Ali, Williams</creator><creator>Abdulai, Awudu</creator><creator>Goetz, Renan</creator><creator>Owusu, Victor</creator><general>Wiley</general><general>Blackwell Publishing Ltd</general><scope>OT2</scope><scope>24P</scope><scope>WIN</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7ST</scope><scope>8BJ</scope><scope>C1K</scope><scope>FQK</scope><scope>JBE</scope><scope>SOI</scope><orcidid>https://orcid.org/0000-0003-2161-9155</orcidid></search><sort><creationdate>202107</creationdate><title>Risk, ambiguity and willingness to participate in crop insurance programs: Evidence from a field experiment</title><author>Ali, Williams ; Abdulai, Awudu ; Goetz, Renan ; Owusu, Victor</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c4124-5ac046fc7d26db7eb53a7a29b4aa446c4a801907a55a9de71ec567799f0f49d13</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2021</creationdate><topic>Ambiguity</topic><topic>ambiguity aversion</topic><topic>Aversion</topic><topic>Cocoa</topic><topic>Crop insurance</topic><topic>Crops</topic><topic>Decision making models</topic><topic>Decisions</topic><topic>Discrete choice</topic><topic>Farmers</topic><topic>field experiments</topic><topic>Field tests</topic><topic>Insurance</topic><topic>Liquidity</topic><topic>liquidity constraints</topic><topic>Risk</topic><topic>Risk analysis</topic><topic>Risk aversion</topic><topic>Risk preferences</topic><topic>Small farms</topic><topic>Uncertainty</topic><topic>Wealth</topic><topic>Willingness</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Ali, Williams</creatorcontrib><creatorcontrib>Abdulai, Awudu</creatorcontrib><creatorcontrib>Goetz, Renan</creatorcontrib><creatorcontrib>Owusu, Victor</creatorcontrib><collection>EconStor</collection><collection>Wiley Online Library Open Access</collection><collection>Wiley Free Content</collection><collection>CrossRef</collection><collection>Environment Abstracts</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Environmental Sciences and Pollution Management</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>Environment Abstracts</collection><jtitle>The Australian journal of agricultural and resource economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Ali, Williams</au><au>Abdulai, Awudu</au><au>Goetz, Renan</au><au>Owusu, Victor</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Risk, ambiguity and willingness to participate in crop insurance programs: Evidence from a field experiment</atitle><jtitle>The Australian journal of agricultural and resource economics</jtitle><date>2021-07</date><risdate>2021</risdate><volume>65</volume><issue>3</issue><spage>679</spage><epage>703</epage><pages>679-703</pages><issn>1467-8489</issn><issn>1364-985X</issn><eissn>1467-8489</eissn><abstract>This paper analyses smallholder farmers’ willingness to participate in crop insurance programs, using recent data from cocoa farmers in Ghana. 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| ispartof | The Australian journal of agricultural and resource economics, 2021-07, Vol.65 (3), p.679-703 |
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| source | Wiley Online Library Journals Frontfile Complete; Business Source Complete; Wiley Free Content; Alma/SFX Local Collection |
| subjects | Ambiguity ambiguity aversion Aversion Cocoa Crop insurance Crops Decision making models Decisions Discrete choice Farmers field experiments Field tests Insurance Liquidity liquidity constraints Risk Risk analysis Risk aversion Risk preferences Small farms Uncertainty Wealth Willingness |
| title | Risk, ambiguity and willingness to participate in crop insurance programs: Evidence from a field experiment |
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