Research on the impact of insurance policies on the welfare effects of pork producers and consumers: Evidence from China

Abstract This study aims to provide a theoretical basis and empirical support for optimizing hog insurance policies, thereby enhancing the welfare levels of both producers and consumers. Based on the concept of compensatory variables, this article develops a model to measure the welfare effects of the hog industry. It analyzes the impact of insurance policies on producer welfare and consumer welfare effects in hog production and marketing balance zones based on data from China’s Production and Sales Balance Area from 2010 to 2022. It is found that the net return of hog production in most provinces in the balance of production and marketing area is positive, and the total welfare effect is significantly improved; the implementation of hog insurance policy promotes the producer welfare effect and the total welfare effect, and there is an inconsistency in the trend of changes in hog insurance and consumer welfare effects; the pig insurance policy in provinces with large pig production and consumption has a relatively weak impact on improving production welfare benefits. Based on the findings, several practical policy recommendations are proposed, including differentiated insurance subsidy adjustments by province, dynamic optimization of welfare enhancement strategies, innovation in pork consumption-oriented insurance products, enhanced data collection, and policy monitoring.