The impact of land certification and risk preferences on investment in soil and water conservation: Evidence from southern Ethiopia

Abstract

This paper evaluates the impact of land certification and risk preferences on the adoption of different soil and water conservation (SWC) technologies using survey data at plot and household level from Ethiopia. Both long-term and short-term investments are considered. Using multivariate probit and correlated random-effect Poisson regression models, we find a heterogeneous impact of land certification on the adoption of SWC techniques among farmers with different risk profiles. We find that certification enhances land investment and that the effect is stronger for more risk-averse farmers. Land certification has a positive effect on the adoption of SWC techniques with a longer payback period such as biological and physical practices, but only for high risk-averse farmers. For short-term investments in SWC techniques like agronomic practices, which are used less to claim the land but with considerable productivity effects, the land certification has a positive effect for both low and high risk-averse farmers, but more strongly for the latter. Hence, our findings suggest that land certification programs could have an important contribution to breaking the risk-induced low technology uptake - agricultural development trap by motivating (particularly risk-averse) farmers to enhance their land investments.