Abstract: [Objective] Currently many researches focus on the influence factors of culture, economy and policy on the famer entrepreneurship. This study investigated the influence of psychological factors on the famer entrepreneurship, in order to find the most important factor and to provide the key data for the further research on this topic. [Method] This paper used prospect theory as a descriptive model of decision-making. The current majority of prospect theory study was conducted on consumer groups and investment decision-making, such as investment management, national policy development, however, less attention was paid on individuals. From the perspective of prospect theory as the start point of view, this study combined psychology with economy. The prospect theory was extended to the areas of production, especially agricultural production based on family units as individual decision, to determine the effects of psychological entrepreneurial farmers and thus the influence on behaviors of entrepreneurship. In this paper, the questionnaires are designed to collect relevant data in the southern middle and northern Jiangsu Province, to establish hypothetical model based on psychological and behavioral factors of foresters entrepreneurial structural equation. AMOS structural equation was used for data fitting, and SPSS was applied to check the reliability and validity of questionnaire data. [Result] Based on statistical tests, we may find out the results as: reference dependence shows a significant positive effect on entrepreneurial attitude; entrepreneurial attitude has a significant positive impact on entrepreneurial intention; the diminishing sensitivity has a significant positive impact on entrepreneurial intention; loss aversion has a significant positive impact on entrepreneurial intention; entrepreneurial intention has a significant positive effect on entrepreneurial behavior; entrepreneurial attitude has a significant positive effect on entrepreneurial behavior; critical path of the model: reference depend → entrepreneurial attitude → entrepreneurial intention → entrepreneurial behavior.[Conclusion] Reference dependence affects the entrepreneurial attitude, entrepreneurial intention and entrepreneurial behavior. In order to obtain the key psychological factors, it is important not only to pay attention to entrepreneurial attitudes and entrepreneurial intention, but also to pay attention to reference dependencies. Reference dependence shows that the majority of judgment relies on the gains and losses from the reference point. To decide the farmers’ entrepreneurial success and failure, it depends on the comparison of profit of others and their own, which is used as reference decisions affecting the farmers favor of their entrepreneurship. The more entrepreneurial farmers are recognized, the stronger that farmers feel to be as successful entrepreneurs. The entrepreneurs are looking forward to testing their creativity and ideas to enhance the status and prestige. The more likely it is prepared to venture, the more it is mentally prepared to participate in entrepreneurship training, with experience accumulation during entrepreneurship. The entrepreneurs may even plan to have many times of entrepreneurship, and thus focus on the practice and even have influence on others entrepreneurial venture.

Key words: prospect theory, forest farmers, entrepreneurial psychology, entrepreneurial behaviors, structural equation