IDEAS home Printed from https://ideas.repec.org/a/spr/envpol/v22y2020i3d10.1007_s10018-020-00262-x.html
   My bibliography  Save this article

Risk preference, trust, and willingness-to-accept subsidies for pro-environmental production: an investigation of hog farmers in China

Author

Listed:
  • Jianhua Wang

    (Jiangnan University
    Jiangnan University)

  • Chenchen Yang

    (Jiangnan University)

  • Wanglin Ma

    (Lincoln University)

  • Jianjun Tang

    (Renmin University of China)

Abstract

The objectives of this study are to investigate Chinese hog farmers’ minimum willingness-to-accept (WTA) subsidies for complying pro-environmental (i.e., safe meat) production, and to explore the factors that affect farmers’ WTA, paying a special attention to the role of risk preference and trust. A double-bounded dichotomous choice (DBDC) approach is used to analyze farmers’ WTA for complying three different hypothetical policy scenarios: the first scenario with delayed and uncertain subsidies, the second scenario with delayed but certain subsidies, and the third scenario with certain and immediate subsidies. Within the DBDC maximum-likelihood estimation framework, we further simultaneously explore how these three scenarios and social-demographic characteristics (e.g., risk preference and trust) affect farmers’ WTA. The data for empirical analysis are collected from 712 hog farmers in Henan and Anhui provinces of China. Our findings indicate that the compromised effectiveness of the current subsidy policy targeting harmless treatment of dead hogs is mainly due to the delayed payment, rather than low subsidy levels. Thus, the policy focus should be given to the pathways that help to simplify the miscellaneous procedures causing the delayed subsidy payments. Our estimates also show that farmers’ trust to the local government affects farmers’ WTA significantly, but their risk preferences do not. In particular, we find that hog farmers with higher trust levels require lower subsidies, suggesting that disseminating the subsidy program via personal networks might be more useful than through government propagandas.

Suggested Citation

  • Jianhua Wang & Chenchen Yang & Wanglin Ma & Jianjun Tang, 2020. "Risk preference, trust, and willingness-to-accept subsidies for pro-environmental production: an investigation of hog farmers in China," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(3), pages 405-431, July.
    • Handle: RePEc:spr:envpol:v:22:y:2020:i:3:d:10.1007_s10018-020-00262-x
    DOI: 10.1007/s10018-020-00262-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10018-020-00262-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10018-020-00262-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Diamantopoulos, Adamantios & Riefler, Petra & Roth, Katharina P., 2008. "Advancing formative measurement models," Journal of Business Research, Elsevier, vol. 61(12), pages 1203-1218, December.
    2. Lohr, Luanne & Salomonsson, Lennart, 2000. "Conversion subsidies for organic production: results from Sweden and lessons for the United States," Agricultural Economics, Blackwell, vol. 22(2), pages 133-146, March.
    3. Coltman, Tim & Devinney, Timothy M. & Midgley, David F. & Venaik, Sunil, 2008. "Formative versus reflective measurement models: Two applications of formative measurement," Journal of Business Research, Elsevier, vol. 61(12), pages 1250-1262, December.
    4. Chabé-Ferret, Sylvain & Subervie, Julie, 2013. "How much green for the buck? Estimating additional and windfall effects of French agro-environmental schemes by DID-matching," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 12-27.
    5. John C. Whitehead, 2002. "Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions," Land Economics, University of Wisconsin Press, vol. 78(2), pages 285-297.
    6. Seroa da Motta, Ronaldo & Ortiz, Ramon Arigoni, 2018. "Costs and Perceptions Conditioning Willingness to Accept Payments for Ecosystem Services in a Brazilian Case," Ecological Economics, Elsevier, vol. 147(C), pages 333-342.
    7. Marita Laukkanen & Céline Nauges, 2014. "Evaluating Greening Farm Policies: A Structural Model for Assessing Agri-environmental Subsidies," Land Economics, University of Wisconsin Press, vol. 90(3), pages 458-481.
    8. Ann-Renée Blais & Elke U. Weber, 2006. "A Domain-Specific Risk-Taking (DOSPERT)Scale for Adult Populations," CIRANO Working Papers 2006s-24, CIRANO.
    9. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    10. Tesfamicheal Wossen & Thomas Berger & Salvatore Di Falco, 2015. "Social capital, risk preference and adoption of improved farm land management practices in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 81-97, January.
    11. Watson, Verity & Ryan, Mandy, 2007. "Exploring preference anomalies in double bounded contingent valuation," Journal of Health Economics, Elsevier, vol. 26(3), pages 463-482, May.
    12. Ann-Renée Blais & Elke U. Weber, 2006. "A Domain-Specific Risk-Taking (DOSPERT) scale for adult populations," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 1, pages 33-47, July.
    13. Hongbin Cai & Yuyu Chen & Hanming Fang & Li-An Zhou, 2009. "Microinsurance, Trust and Economic Development: Evidence from a Randomized Natural Field Experiment," PIER Working Paper Archive 09-034, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    14. repec:cup:judgdm:v:1:y:2006:i::p:33-47 is not listed on IDEAS
    15. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    16. Charness, Gary & Gneezy, Uri & Imas, Alex, 2013. "Experimental methods: Eliciting risk preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 43-51.
    17. Elaine M. Liu, 2008. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," Working Papers 1064, Princeton University, Department of Economics, Industrial Relations Section..
    18. David A. Hennessy & Christopher A. Wolf, 2018. "Asymmetric Information, Externalities and Incentives in Animal Disease Prevention and Control," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(1), pages 226-242, February.
    19. Mónica M. Jaime & Jessica Coria & Xiangping Liu, 2016. "Interactions between CAP Agricultural and Agri-Environmental Subsidies and Their Effects on the Uptake of Organic Farming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1114-1145.
    20. Frédéric Salladarré & Dorothée Brécard & Sterenn Lucas & Pierrick Ollivier, 2016. "Are French consumers ready to pay a premium for eco-labeled seafood products? A contingent valuation estimation with heterogeneous anchoring," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 247-258, March.
    21. Luisa Menapace & Gregory Colson & Roberta Raffaelli, 2016. "A comparison of hypothetical risk attitude elicitation instruments for explaining farmer crop insurance purchases," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(1), pages 113-135.
    22. Christensen, Tove & Pedersen, Anders Branth & Nielsen, Helle Oersted & Mørkbak, Morten Raun & Hasler, Berit & Denver, Sigrid, 2011. "Determinants of farmers' willingness to participate in subsidy schemes for pesticide-free buffer zones--A choice experiment study," Ecological Economics, Elsevier, vol. 70(8), pages 1558-1564, June.
    23. Elaine M. Liu, 2013. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1386-1403, October.
    24. Jules Pretty & Craig Brett & David Gee & Rachel Hine & Chris Mason & James Morison & Matthew Rayment & Gert Van Der Bijl & Thomas Dobbs, 2001. "Policy Challenges and Priorities for Internalizing the Externalities of Modern Agriculture," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 44(2), pages 263-283.
    25. Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
    26. Lindhjem, Henrik & Mitani, Yohei, 2012. "Forest owners’ willingness to accept compensation for voluntary conservation: A contingent valuation approach," Journal of Forest Economics, Elsevier, vol. 18(4), pages 290-302.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hendrawan, Dienda & Musshoff, Oliver, 2024. "Smallholders' preferred attributes in a subsidy program for replanting overaged oil palm plantations in Indonesia," Ecological Economics, Elsevier, vol. 224(C).
    2. Xiaojing Li & Apurbo Sarkar & Xianli Xia & Waqar Hussain Memon, 2021. "Village Environment, Capital Endowment, and Farmers’ Participation in E-Commerce Sales Behavior: A Demand Observable Bivariate Probit Model Approach," Agriculture, MDPI, vol. 11(9), pages 1-20, September.
    3. Ruishi Si & Xueqian Zhang & Yumeng Yao & Qian Lu, 2022. "Risk Preference, Health Risk Perception, and Environmental Exposure Nexus: Evidence from Rural Women as Pig Breeders, China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 151-178, July.
    4. Vanessa Bonke & Marius Michels & Oliver Musshoff, 2021. "Will Farmers Accept Lower Gross Margins for the Sustainable Cultivation Method of Mixed Cropping? First Insights from Germany," Sustainability, MDPI, vol. 13(4), pages 1-13, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goytom Abraha Kahsay & Daniel Osberghaus, 2018. "Storm Damage and Risk Preferences: Panel Evidence from Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 301-318, September.
    2. Petraud, Jean & Boucher, Stephen & Carter, Michael, 2015. "Competing theories of risk preferences and the demand for crop insurance: Experimental evidence from Peru," 2015 Conference, August 9-14, 2015, Milan, Italy 211383, International Association of Agricultural Economists.
    3. Bartczak, Anna & Chilton, Susan & Meyerhoff, Jürgen, 2015. "Wildfires in Poland: The impact of risk preferences and loss aversion on environmental choices," Ecological Economics, Elsevier, vol. 116(C), pages 300-309.
    4. repec:cup:judgdm:v:16:y:2021:i:5:p:1290-1313 is not listed on IDEAS
    5. Boyd, Chris M. & Bellemare, Marc F., 2022. "Why not insure prices? Experimental evidence from Peru," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 580-631.
    6. Clist, Paul & D’Exelle, Ben & Verschoor, Arjan, 2021. "An endowment effect for risk levels: Evidence from a Ugandan lab," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 297-310.
    7. Freudenreich, Hanna & Musshoff, Oliver, 2022. "Experience of losses and aversion to uncertainty - experimental evidence from farmers in Mexico," Ecological Economics, Elsevier, vol. 195(C).
    8. Elisabeth Vollmer & Daniel Hermann & Oliver Musshoff, 2019. "The disposition effect in farmers’ selling behavior: an experimental investigation," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 177-189, March.
    9. Auriol, Emmanuelle & Delissaint, Diego & Fourati, Maleke & Miquel-Florensa, Josepa & Seabright, Paul, 2021. "Betting on the lord: Lotteries and religiosity in Haiti," World Development, Elsevier, vol. 144(C).
    10. Julia Ihli, Hanna & Chiputwa, Brian & Winter, Etti & Gassner, Anja, 2022. "Risk and time preferences for participating in forest landscape restoration: The case of coffee farmers in Uganda," World Development, Elsevier, vol. 150(C).
    11. Villacis, Alexis H. & Bloem, Jeffrey R. & Mishra, Ashok K., 2023. "Aspirations, risk preferences, and investments in agricultural technologies," Food Policy, Elsevier, vol. 120(C).
    12. Alexis H. Villacis & Jeffrey R. Alwang & Victor Barrera, 2021. "Linking risk preferences and risk perceptions of climate change: A prospect theory approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 863-877, September.
    13. Brañas-Garza, Pablo & Estepa-Mohedano, Lorenzo & Jorrat, Diego & Orozco, Victor & Rascón-Ramírez, Ericka, 2021. "To pay or not to pay: Measuring risk preferences in lab and field," Judgment and Decision Making, Cambridge University Press, vol. 16(5), pages 1290-1313, September.
    14. Toritseju Begho & Kelvin Balcombe, 2023. "Attitudes to Risk and Uncertainty: New Insights From an Experiment Using Interval Prospects," SAGE Open, , vol. 13(3), pages 21582440231, July.
    15. Bruns, Selina JK & Hermann, Daniel & Musshoff, Oliver, 2022. "Is gamification a curse or blessing for the design of risk elicitation methods in the field? Experimental evidence from Cambodian smallholder farmers," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322263, Agricultural and Applied Economics Association.
    16. Simone Cerroni, 2020. "Eliciting farmers’ subjective probabilities, risk, and uncertainty preferences using contextualized field experiments," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 707-724, September.
    17. Arnaud A. Reynaud & Stéphane S. Couture, 2011. "Stability of risk preference measures: results from a field experiment on french farmers," Post-Print hal-02803766, HAL.
    18. repec:rza:wpaper:272 is not listed on IDEAS
    19. Gonzalez Ramirez, M. Jimena & Meriggi, Niccolo, 2016. "A Study of Intra-household and Gender Differences in Risk Preferences and Their Effect on Household Investment Decisions in Rural Cameroon," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236078, Agricultural and Applied Economics Association.
    20. Rashmita Basu, 2013. "Willingness-to-pay to prevent Alzheimer’s disease: a contingent valuation approach," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 233-245, December.
    21. Jinhua Xie & Gangqiao Yang & Ge Wang & Shuoyan He, 2024. "How does social capital affect farmers’ environment-friendly technology adoption behavior? A case study in Hubei Province, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 18361-18384, July.
    22. Freudenreich, Hanna & Musshoff, Oliver & Wiercinski, Ben, 2017. "The Relationship between Farmers' Shock Experiences and their Uncertainty Preferences - Experimental Evidence from Mexico," GlobalFood Discussion Papers 256212, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.

    More about this item

    Keywords

    Willingness-to-accept; Subsidies; Risk preference; Trust; Safe meat production; China;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:envpol:v:22:y:2020:i:3:d:10.1007_s10018-020-00262-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.