Essays on rural household decision-making under climate risk

In the poverty reduction discourse, a growing attention has been devoted to correctly include considerations related to rural households' capacity to cope with and adapt to the effects of climate change. The main aim of this dissertation is to provide a broader understanding of the changes in rural household decision-making and behavioural responses, which determine their immediate and future income generating capacities, in response to climate shocks and climate risk management strategies. In this light, the three empirical chapters of the dissertation examine the impact pathways in the climate risk-welfare nexus and identify policy-related drivers for adoption of climate-smart agricultural innovations and high-risk high-return agricultural technologies. As such, the dissertation sheds light on policy options to enhance rural households’ capacity to manage climate shocks without sacrificing their investments in human, physical and natural capital.