The impact of risk perception and preference on farmland transfer-out: Evidence from a survey of farm households in China

This study examines the impact of farmers' risk perceptions on their decision to transfer-out farmland, as well as the variations in this influence based on different risk preferences. The research utilizes survey data from 1389 farmers in rural China. By expanding the decision-making model for farmer households within the context of risk perception, this paper analyzes the equilibrium point of farmers' decision-making using mathematical models. Employing the Probit and Tobit models with instrumental variable methods, we discovered that farmers' perceptions of land revenue risk, land use risk, and non-farm employment risk significantly hindered the decision and rate of farmland transfer-out. Notably, the inhibitory effect decreased progressively. Moreover, risk preference was found to moderates the negative impacts. However, it is worth noting that risk perception remains a crucial factor impeding farmland transfer, primarily due to the prevalence of neutral or risk-averse risk preferences among most farmers. This study presents a novel perspective and explanatory framework for development of the farmland circulation market, aiming to overcome existing challenges from a risk-oriented standpoint. Consequently, it is essential for the government to carefully address all risks associated with farmland transfer, enhance the income guarantee system for farmers post-transfer, and offer non-farm employment training and job opportunities to facilitate the healthy and rapid development of the agricultural land transfer market.