agriculture Article Can Trust Motivate Farmers to Purchase Natural Disaster Insurance? Evidence from Earthquake-Stricken Areas of Sichuan, China Xueling Bao 1, Fengwan Zhang 1, Xin Deng 2 and Dingde Xu 1,3,* 1 College of Management, Sichuan Agricultural University, Chengdu 611130, China; [email protected] (X.B.); [email protected] (F.Z.) 2 College of Economics, Sichuan Agricultural University, Chengdu 611130, China; [email protected] 3 Sichuan Center for Rural Development Research, College of Management, Sichuan Agricultural University, Chengdu 611130, China * Correspondence: [email protected]; Tel.: +86-134-0859-8819 Abstract: Natural disasters cause great losses of property and life in many areas of China. However, rural residents do not always insure themselves against these losses. Measuring the correlation between trust and farmers’ behavior related to the purchasing of natural disaster insurance is of great significance to the implementation of natural disaster insurance pilot programs and insurance systems in China. This article analyzes data from a survey of 327 households in four districts and counties of Sichuan Province, China, that were affected by the Wenchuan and Lushan earthquakes. According to the relevant theories of trust, trust was divided into three dimensions: authority trust, collective trust, and relationship trust. Then a technology acceptance model was built, and PLS-SEM was used to comprehensively analyze the correlation between different dimensions of trust and farmers’ insurance purchase behavior. The results show that (1) only relationship trust was directly Citation: Bao, X.; Zhang, F.; Deng, X.; and significantly positively correlated with insurance purchasing behavior. Although there was Xu, D. Can Trust Motivate Farmers to no direct significant correlation between authoritative trust or collective trust and buying behavior, Purchase Natural Disaster Insurance? relationship trust was found to indirectly affect buying behavior. (2) Younger farmers and those with Evidence from Earthquake-Stricken higher incomes are more likely to buy disaster insurance if they live in a disaster-threat zone, have Areas of Sichuan, China. Agriculture experienced disasters, and are risk averse. We then discuss the correlations between farmers’ trust 2021, 11, 783. https://doi.org/ and natural disaster insurance purchasing in areas threatened by earthquake disasters. This provides 10.3390/agriculture11080783 a policy inspiration for the promotion of disaster insurance and the construction of insurance systems Academic Editor: Terence J. Centner in China. Received: 28 July 2021 Keywords: trust; natural disaster insurance; PLS-SEM; technology acceptance model; correla- Accepted: 15 August 2021 tion judgment Published: 17 August 2021 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in 1. Introduction published maps and institutional affil- Natural disasters refer to events in which abnormal changes in nature exceed the iations. tolerance that humans can bear [1,2], resulting in human casualties, property losses, social instability, resource destruction, and other phenomena or a series of injuries to human society and economy, mainly including geophysical disasters (such as earthquakes and vol- canoes) and climate-induced disasters (such as floods, storms, and landslides) [3–6]. China Copyright: © 2021 by the authors. is a large mountainous country in which hilly areas account for 70% of the total land area Licensee MDPI, Basel, Switzerland. and host about 45% of the population [7–14]. Influenced by geology and geomorphology, This article is an open access article mountainous areas have been prone to natural disasters since ancient times [15,16]. Their distributed under the terms and disasters are characterized by chain reactions and mass occurrences [17–21]. This makes conditions of the Creative Commons China one of the countries with the worst natural disasters in the world [22–24]. Sichuan Attribution (CC BY) license (https:// Province is one of the most famous earthquake disaster regions in the world and suffers creativecommons.org/licenses/by/ great losses from earthquakes [25,26]. Some 204 earthquakes of magnitude ≥5 occurred 4.0/). Agriculture 2021, 11, 783. https://doi.org/10.3390/agriculture11080783 https://www.mdpi.com/journal/agriculture Agriculture 2021, 11, 783 2 of 15 in China from 2004 to 2019, causing 561,800 casualties and direct economic losses of RMB 1.14 trillion [27]. Among them, the Wenchuan earthquake of 12 May 2008 and the Lushan earthquake of 20 April 2013 were magnitude ≥7 and caused about 450,000 casualties and more than RMB 900 billion in direct economic losses. For residents of some areas, natural disasters are inevitable. They cause huge losses that far exceed the residents’ ability to bear [28–31]. As early as 1991, some scholars put forward theories related to behavioral insurance and risk aversion, and now these theories have been used maturely [32]. In this context, natural disaster insurance came into being [33,34]. At present, natural disaster insurance refers to the institutional arrangement of risk diversification and economic com- pensation in the form of insurance by a government or other public organizations [35,36]. It uses the insurance mechanism to mitigate the huge property losses and serious casualties caused by natural disasters, such as earthquakes, hurricanes, tsunamis, and floods [37]. Although natural disaster insurance has been implemented in China for several years, some studies have found that the proportion of farmers purchasing natural disaster insurance is low [38]. Is this because local governments do not promote insurance sufficiently? Is it that local residents do not trust insurance schemes to protect people and property? This is an anomaly well worth studying. Improving the insurance purchasing intentions and behaviors of residents of natural disaster areas, especially disaster areas, has become a difficult problem in academic and political circles. The main research question is: why do only a small proportion of people at risk of nat- ural disasters purchase disaster insurance? Some scholars have analyzed this phenomenon by considering the roles of governmental/societal assistance and insurance, finding that the former has a “crowding-out effect” on residents’ insurance purchasing [39,40]. The reason for the above phenomenon is precisely that the government often participates in disaster relief; residents expect to receive its benefits. Hence, they may confuse insurance liability with social responsibility, which reduces their motivation to purchase disaster insurance. The willingness, behavior, and influencing factors of purchasing natural dis- aster insurance have always been a focus of academic research [41–43]. Existing studies have mostly considered residents’ personal characteristics, their families’ socioeconomic characteristics, and government charity risk and have analyzed their correlations with insurance purchasing. For example, Dumm et al. [44] found that residents with a bet- ter understanding of the characteristics of natural disasters feel a more urgent need for insurance, and the occurrence of a disaster will greatly enhance residents’ demand for insurance [44,45]. Zhu [46] found that residents’ background cognition of earthquake risk was correlated with their insurance purchasing behavior. In fact, this behavior of residents or farmers buying natural disaster insurance essentially involves a consumer purchasing a commodity, and factors such as consumer income, recognition of goods, and trust in goods may all affect consumers’ final purchase behavior [47]. However, few scholars have studied disaster insurance purchasing behavior and its influencing factors from this perspective. This is because, in traditional transactions, consumers can identify the quality of goods by what they see, touch, and feel when they use them. However, insurance products are purchased in advance in an environment involving distrust factors and high perceived risk [48]. Therefore, when purchasing such goods, consumers will pay attention to the factor of trust. Essentially, trust is a type of psychological expectation involved in interpersonal communication [49]. It can be divided into public trust and interpersonal trust [50]. Among them, governmental trust and collective trust are types of public trust which are established on the basis of law, politics, and other factors [51]. Government trust includes residents’ psychological expectations and belief that the government will support their interests, while collective trust involves residents’ expectations, dependence, and attributions related to local groups [52]. Generally speaking, the higher is the credibility of the local government, the stronger is its appeal and the more active residents are in participating in public policies [53]. Correspondingly, interpersonal trust is based on the relationships between people [54,55]. Agriculture 2021, 11, 783 3 of 15 Although some scholars have realized the importance of trust in insurance purchasing, there are relatively few empirical studies on the relationship between trust and insurance in general. In the few that exist, there are some deficiencies. On the one hand, although some scholars have focused on the correlation between trust and insurance purchasing, most have considered new agricultural insurance and general commercial insurance rather than natural disaster insurance. For example, Huo et al. [49] found that under