FULL-COST INSURANCE, SOCIAL NETWORK EMBEDDEDNESS, AND GRAIN FARMERS’ PERCEIVED VALUE OF INSURANCE: EVIDENCE FROM A SURVEY OF FARMING HOUSEHOLDS IN JIANGSU, SHANDONG, HENAN, AND ANHUI PROVINCES, CHINA

Abstract

The key to addressing the "High insured amount, low perceived benefit" issue in agricultural insurance for developing countries lies in enhancing farmers' perceived value of agricultural insurance. Drawing on survey data from farmers in in four provinces of China: Jiangsu, Shandong, Henan, and Anhui provinces, this study integrates social networks into a theoretical framework and employs multiple linear regression and Tobit regression to analyze their impact on farmers’ perceived value of full cost insurance, elucidating the mechanism through which these networks amplify the perceived value of this full cost insurance. The results demonstrate that social networks enhance farmers’ perceived value of full cost insurance through information dissemination, with the rationality of insurance compensation serving as a positive moderating factor. Heterogeneity analysis reveals that the perception-enhancing effect is more pronounced among large-scale farmers. This study provides empirical evidence to refine full cost insurance policies.