Research on crop insurance and change in farmers' welfare: Evidence from China's Inner Mongolia

Abstract

Using Amartya Sen's capability approach and household survey data from Inner Mongolia, China, this paper constructs a welfare index in order to examine the impact of crop insurance on the welfare of farmers. Fuzzy comprehensive evaluation methods were used to measure changes in farmers' welfare before and after participating in crop insurance, and these were empirically tested to identify differences in the factors affecting farmers' welfare. It was found that after participating in crop insurance, the overall welfare level of farmers slightly increased. Many functional indicators improved, such as family economic status, working status, protective security, and psychological experience; however, the living environment and leisure time of farmers deteriorated after participation. From the perspective of conversion factors, variables such as the educational level of the head of household, the total number of members in a given household, the policy of crop insurance and regional economic development level all have a significant impact on the changes in farmers' welfare.