<p>This study assesses the economic implications of reduced agricultural yields due to climate change in Kenya. Furthermore, it explores how different options for implementing exogenous climate change-induced yield shocks at different levels within the CGE production structure affect model results. Exogenous yield shocks are implemented either as changes in total factor productivity, value-added or land productivity. Value-added and land productivity changes are applied as unscaled shocks or scaled-up based on their cost shares. Results indicate that the economic impact of yield shocks varies depending on how and where the shocks are implemented within the production hierarchy. We suggest applying unscaled yield shocks at the TFP level as the most adequate approach to depict their economy-wide effects. This is because shocks being implemented at lower levels of the production nest tend to underestimate overall effects if applied unscaled and overestimate overall effects if they are scaled-up. Climate change-induced yield changes have complex effects on the Kenyan economy, including both direct and indirect impacts. Overall, negative outweigh positive effects. Welfare effects differ across household groups, reflecting heterogeneity in income and expenditure composition. Urban households experience larger welfare losses than rural ones, driven by increasing cost of living due to rising food prices, while the relatively larger decline in factor income compared to rural households magnifies this effect. Similarly, poor households are hit more than non-poor households, as they have higher expenditure shares for food, which increases in price.</p>