Abstract
Determining risk attitude and examining the factors influencing insurance adoption is an analytical process aimed at understanding farmers’ behavior when facing economic and environmental uncertainties. In this analysis, farmers’ willingness to accept or avoid risk and the factors affecting their decision to purchase insurance are investigated. This study was conducted to determine the risk attitude and examine the factors affecting insurance adoption among pistachio farmers in Kerman province. The research was carried out using documentary and survey methods through researcher-developed questionnaires, and interviews were conducted using a convenience sampling method during the 2023-2024 agricultural year. In this study, the First-Certainty Rule method and the probit technique were applied, using cross-sectional data from pistachio farmers in Kerman province for the 2023-2024 period. The results indicated that, due to the innovative and experimental nature of the proposed insurance scheme as well as the subsidized premium, pistachio farmers in Kerman province generally exhibited a relatively high level of risk tolerance. Other findings showed that variables such as the area under productive cultivation, farmers’ risk aversion coefficient, and their debt-to-asset ratio significantly affected the likelihood of insurance adoption. Finally, considering the importance of the risk aversion coefficient in this study, insurance demand functions were estimated separately for both risk-tolerant and risk-averse groups, and the results were compared. It is recommended that insurance packages be designed according to risk levels, training and awareness be provided, farmers’ behavior be analyzed using predictive models, and financial incentives be offered to increase insurance adoption.