Farmers' Preferences for Coffee Weather Index Insurance Attributes: Evidence from a Choice Experiment in China

Coffee Weather Index Insurance (WII) provides smallholders with a critical buffer against climate-related losses. This study aims to investigate Chinese coffee farmers' preferences for coffee WII using a choice experiment. The results show that a majority of farmers are willing to purchase coffee WII. Attributes including the premium rate, insured amount, premium subsidy, and type of protection significantly influence farmers' preferences. Specifically, farmers favor coffee WII with revenue protection, a lower insured amount, a higher premium subsidy, and a lower premium rate. Basis risk does not significantly deter uptake. Furthermore, farmers' gender, education level, and their anticipated impact of future high temperatures on coffee production play pivotal roles in shaping WII demand. These findings offer valuable insights for insurers and policymakers, informing the design of coffee WII policies that align with local preferences and can enhance the participation of coffee farmers in WII programs.