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Does crop insurance reduce pesticide usage? Evidence from China

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Abstract We test how crop insurance participation affects the intensity of pesticide use in China using data on staple crop production from eight provinces. Our preferred specification instruments farmers' decisions… Click to show full abstract

Abstract We test how crop insurance participation affects the intensity of pesticide use in China using data on staple crop production from eight provinces. Our preferred specification instruments farmers' decisions of participation in insurance by village-level intensities of promotional activities and controls for province fixed effects. We find crop insurance participation significantly reduces pesticide use intensity. The reduction effect is greater for smaller plots, older farmers, and farmers who are more risk averse.

Keywords: pesticide; crop; insurance reduce; crop insurance; china; insurance

Journal Title: China Economic Review
Year Published: 2021

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