Crop insurance impact on north-east Chinese maize farmers in terms of welfare gain and moral hazards

Name: Le, Shengyue

LCSH: Kasetsart University -- Dissertations. Ph.D. (Agricultural and Resource Economics) 2020

Classification :.LCCS: HG9968

LCSH: Kasetsart University. -- Department of Agricultural and Resource Economics -- Dissertations

LCSH: Crop insurance

LCSH: Insurance

Abstract: The article evaluates the expected welfare gain and evaluates the extent of moral hazards from voluntary partial government-subsidized maize insurance in North-east China. 356 maize growing households’ risk preferences from Lin Kou county of Hei Long Jiang province are examined and their expected welfare gains were analysed by the Expected Utility Theory with each farmer’s unique risk preference. The households’ behavioural changes in cultivating maize were measured after controlling the bias with the propensity-score matching method. The research found that most of maize growing households are risk-averse. In term of expected welfare gain, the research pointed out that providing the existing crop insurance creates a welfare gain of about CNY 177 per hectare. However, this estimated welfare gain might be reduced to only CNY 124 per hectare if the local government decided to provide full insurance premium subsidy with a lower level of protection at the same fiscal budget. Further, the results indicated that about 36% of the households made wrong decisions in buying the crop insurance. The households with fewer family members and a lower portion of non-farming income are more likely to make wrong decisions. Regarding the moral hazard evaluation, the research found that households with crop insurance put 133.03 kilograms more base fertilizer, but 144.49 kilograms less topdressing per hectare, and use herbicide more often by 0.3 times. Higher doses of base fertilizer and herbicide which are more convenient but not efficient in practice, are signs of less care and the evidence of moral hazards in the current term of crop insurance. To mitigate moral hazards and improve the efficiency of the crop insurance program, more specific claimable causes of loss and higher protection level per hectare are suggested.

Kasetsart University. Office of the University Library

Address: Bangkok

Email: tdckulib@ku.ac.th

Name: Santi Sanglestsawai

Role: Thesis Advisor

Name: Ravissa Suchato

Role: Thesis CO-Advisor

Name: Isriya Bunyasiri

Role: Thesis CO-Advisor

Created: 2020

Modified: 2025-07-02

Issued: 2025-07-02

วิทยานิพนธ์/Thesis

application/pdf

URL: https://www.lib.ku.ac.th/KUthesis/2563/shengyue-le-all.pdf

CallNumber: HG9968 .L4

eng

DegreeName: Doctor of Philosophy

Level: Doctoral Degraee

Descipline: Economics

Grantor: Kasetsart University

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