Farmers’ Risk Preferences in Rural China: Measurements and Determinants
Abstract
:1. Introduction
2. Survey and Experimental Design
2.1. Survey Design
2.2. Design of the Experiment
2.3. Sample and Data Collection
3. Empirical Results and Discussion
3.1. Demographic Profile of the Sample
3.2. Willingness to Take Risks in General
3.3. MPL Results
3.4. Experiment and Self-Assessment
4. Conclusions
Acknowledgments
Author Contributions
Conflicts of Interest
References
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Task | Option A | Option B | EV A–EV B | CRRA Ranges |
---|---|---|---|---|
1 | 20 CNY | 20 CNY if heads; 0 CNY if tails | 10 CNY | r < −1.4 |
2 | 15 CNY | 20 CNY if heads; 0 CNY if tails | 5 CNY | −1.4 < r < −0.4 |
3 | 12 CNY | 20 CNY if heads; 0 CNY if tails | 2 CNY | −0.4 < r < 0 |
4 | 10 CNY | 20 CNY if heads; 0 CNY if tails | 0 CNY | 0 < r < 0.2 |
5 | 8 CNY | 20 CNY if heads; 0 CNY if tails | −2 CNY | 0.2 < r < 0.4 |
6 | 6 CNY | 20 CNY if heads; 0 CNY if tails | −4 CNY | 0.4 < r < 0.6 |
7 | 4 CNY | 20 CNY if heads; 0 CNY if tails | −6 CNY | 0.6 < r < 0.7 |
8 | 2 CNY | 20 CNY if heads; 0 CNY if tails | −8 CNY | 0.7 < r |
Variables | Description | Mean | Standard Deviation | Provincial Average |
---|---|---|---|---|
Gender | 1 = male, 0 = female | 0.46 | 0.49 | 0.51 |
Age | Age of respondent (years) | 41 | 12 | n/a |
Height | Height of the respondent (cm) | 163 | 6.65 | n/a |
Education | Education of the respondent (1 = No formal schooling, 2 = Elementary, 3 = Middle school, 4 = College, 5 = Masters or above) | 2.96 | 0.80 | 2.50 |
Hhsize | Number of household members living together | 4.80 | 1.30 | 4 |
Farmyears | Years in farming | 19.72 | 13.18 | n/a |
Happiness | Self-reported happiness (0 = completely unhappy; 10 = completely happy) | 7.78 | 2.14 | n/a |
Hincome | Household income (1000 CNY/month) | 3.47 | 2.47 | 3.85 |
Variable | (1) | (2) | (3) | (4) | (5) | (6) |
---|---|---|---|---|---|---|
Gender | 0.63 *** (0.17) | 0.63 *** (0.17) | 0.64 *** (0.17) | 0.63 *** (0.17) | 0.64 *** (0.17) | 0.65 *** (0.17) |
Age | −0.03 *** (0.006) | −0.03 *** (0.006) | −0.03 ** (0.006) | −0.03 *** (0.007) | −0.05 *** (0.01) | −0.05 *** (0.01) |
Height | 0.05 *** (0.01) | 0.05 *** (0.01) | 0.06 *** (0.01) | 0.05 *** (0.01) | 0.05 *** (0.01) | 0.05 *** (0.01) |
Happiness | 0.17 *** (0.04) | 0.18 *** (0.37) | ||||
Eucation | −0.12 (0.07) | −0.08 (0.07) | ||||
Hincome | 0.004 (0.03) | −0.02 (0.03) | ||||
Farmyears | 0.02 ** (0.01) | 0.02 * (0.01) | ||||
Log likelihood | −357 | −346 | −357 | −356 | −355 | −343 |
LR Chi2 | 78.76 *** | 100.69 *** | 78.32 *** | 78.79 *** | 82.49 *** | 106.78 *** |
Observations | 200 | 200 | 200 | 200 | 200 | 200 |
No. of Times Subject Choose Safe Option | Switch Point to the Lottery | No. of Subjects (%) |
---|---|---|
0 | Always Lottery B | 5 (2.5%) |
1 | 2 | 5 (2.5%) |
2 | 3 | 5 (2.5%) |
3 | 4 | 20 (10%) |
4 | 5 | 77 (38.5%) |
5 | 6 | 50 (25%) |
6 | 7 | 20 (10%) |
7 | 8 | 6 (3%) |
8 | Always Lottery A | 12 (6%) |
Variable | Estimate | Std. Err. | p-Value | Lower 95% CI | Upper 95% CI |
---|---|---|---|---|---|
Gender | −0.27 *** | 0.07 | 0.000 | −0.41 | −0.12 |
Age | 0.02 *** | 0.00 | 0.002 | 0.01 | 0.02 |
Height | −0.01 ** | 0.01 | 0.044 | −0.02 | 0.00 |
Happiness | 0.01 | 0.02 | 0.457 | −0.02 | 0.04 |
Education | −0.04 | 0.03 | 0.276 | −0.10 | 0.03 |
Hincome | 0.00 | 0.00 | 0.141 | −0.01 | 0.05 |
Farmyears | 0.01 ** | 0.00 | 0.013 | 0.00 | 0.02 |
Constant | 2.59 ** | 1.04 | 0.012 | 0.56 | 4.63 |
Summary statistics | |||||
Log likelihood | −420 | ||||
LR Chi2 | 23.16 *** | ||||
Observations | 200 |
Category | MPL | Survey | Consistent Response |
---|---|---|---|
Risk aversion | 86 (43%) | 61 (31%) | 38 (19%) |
Risk neutral | 77 (39%) | 71 (36%) | 37 (19%) |
Risk lover | 37 (18%) | 68 (34%) | 20 (10%) |
Variables | (1) | (2) | (3) |
---|---|---|---|
Constant | −0.09 (0.08) | 2.76 *** (1.04) | 2.82 *** (1.04) |
General willingness to take risk | 0.11 *** (0.05) | 0.04 ** (0.02) | 0.03 * (0.02) |
Gender | −0.21 *** (0.08) | −0.23 * (0.08) | |
Age | −0.003 (0.001) | 0.01 ** (0.004) | |
Height | −0.02 *** (0.006) | −0.01 ** (0.06) | |
Happiness | 0.001 (0.02) | ||
Education | –0.03 (0.03) | ||
Hincome | 0.02 (0.01) | ||
Farmyears | 0.01** (0.004) | ||
Log sigma | 0.76 *** (0.05) | 0.79 *** (0.05) | 0.81 *** (0.05) |
Log likelihood | −428 | −423 | −418 |
LR Chi2 | 7.03 *** | 17.02 *** | 25.93 *** |
Observations | 200 | 200 | 200 |
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Jin, J.; He, R.; Gong, H.; Xu, X.; He, C. Farmers’ Risk Preferences in Rural China: Measurements and Determinants. Int. J. Environ. Res. Public Health 2017, 14, 713. https://doi.org/10.3390/ijerph14070713
Jin J, He R, Gong H, Xu X, He C. Farmers’ Risk Preferences in Rural China: Measurements and Determinants. International Journal of Environmental Research and Public Health. 2017; 14(7):713. https://doi.org/10.3390/ijerph14070713
Chicago/Turabian StyleJin, Jianjun, Rui He, Haozhou Gong, Xia Xu, and Chunyang He. 2017. "Farmers’ Risk Preferences in Rural China: Measurements and Determinants" International Journal of Environmental Research and Public Health 14, no. 7: 713. https://doi.org/10.3390/ijerph14070713