Incentive-compatible risk preferences and sustainable land management adoption under climate risk: Evidence from semi-arid Kenya

Sustainable land management (SLM) practices are widely promoted as an effective pathway for mitigating climate-induced production risks and enhancing agricultural sustainability. However, their uptake has remained low across Sub-Saharan Africa despite the associated benefits. Existing studies have primarily evaluated socio-economic and institutional determinants, with limited evidence on incentivized risk preference and loss aversion, particularly for multiple practice adoption. This gap is especially consequential in arid and semi-arid regions, where production uncertainty is high and adoption decisions are inherently risky. In South Eastern Kenya (SEK), recurrent droughts and extreme climate events have contributed to widespread food insecurity, crop losses, and livestock deaths, making adoption important for agricultural sustainability and climate resilience. Using data from 867 farm households selected through multistage sampling in semi-arid SEK, this study examines how risk preference and loss aversion are associated with SLM adoption breadth. An incentivized field experiment was employed to elicit both measures while adoption behaviour was assessed using a generalized Poisson regression model. Risk-loving farmers show greater adoption breadth than risk-averse farmers, while higher loss aversion is associated with lower adoption breadth. Locus of control, aspiration, wealth, shock exposure and crop diversity are positively associated with adoption breadth. Perceived climate-resilience benefits show a modest positive association, whereas perceived productivity and environmental-quality benefits are negatively associated. These findings highlight the relevance of behavioural heterogeneity for strategies to broaden SLM adoption in climate-vulnerable semi-arid areas.