Herders' risk preference and grassland transfer strategy: Evidence from a field experiment in pastoral areas of China

Abstract Encouraging and guiding herders to participate in grassland transfer promotes the high‐quality development of grassland animal husbandry. We conducted a survey among 356 herders from Qinghai and Gansu provinces in China, to explore the impact of herders' risk preference and perceptions on their grassland transfer strategies. We used experimental economics methods to measure the risk preferences of herders. Our results indicate that the majority of herders exhibit risk‐averse attitudes. A theoretical model was used to establish hypotheses on the relationship between risk preference and grassland transfer decision‐making. The double‐hurdle model and moderating effect model were used to test these hypotheses. Our analysis shows that herders' risk preferences have a significant negative effect on their decisions to engage in grassland transfer. Both risk preferences and risk perception have a significant impact on grassland transfer‐in decisions, but no significant impact on grassland transfer‐out. A heterogeneity analysis revealed that the impact of risk preferences on grassland transfer participation is more pronounced among herders in Qinghai compared to those in Gansu. Moreover, we found that risk perception plays a moderating role on the influence of risk preferences on decisions regarding grassland transfer. These findings are crucial to formulate strategies for the sustainable management of the grassland transfer market.