Risk Aversion Mediates the Impact of Environmental Change Perceptions on Farmers’ Livelihood Strategies: A PLS-SEM Study

Farmers’ perceptions of environmental change are a key trigger for livelihood behaviors. However, it remains unclear how these perceptions become specific livelihood strategies through internal psychological processes. To address this, this study constructs an analytical framework. It integrates multidimensional environmental perceptions, risk aversion, and livelihood strategies. Particular focus is given to the mediating role of risk aversion in the link between perception of environmental change and livelihood strategy. The proposed mechanism is tested using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that farmers pursue both adaptive and defensive livelihood strategies. They balance security with development opportunities. Perceptions of ecological transition and market volatility significantly affect both adaptive and defensive strategies. Perception of social dynamics mainly influences adaptive strategies. The perception of policy adjustment has no significant effect. Risk aversion mediates these relationships. It strengthens defensive behaviors while promoting adaptive actions, showing its dual function in risk management and proactive adaptation. These findings underscore the complexity of decision-making in rural areas. They elucidate how environmental perceptions shape risk awareness and responses to livelihoods. This offers insights for policies aimed at enhancing rural resilience.