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The Corn Price Surge: Impacts on Rural Mexico

  • Dyer, George A.
  • Taylor, J. Edward
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    We use an agent-based, general-equilibrium model to explore the impacts of world corn-price increases on land use and income in rural Mexico. In the model, interactions among heterogeneous agents within a local context shape both macro and microeconomic outcomes. Results suggest that subsistence activities allowed agriculture to absorb the shock, limiting the benefits of higher prices for the population while keeping deforestation pressures in check. An estimated 5.7% corn-area expansion by 2008 and wide variation across regions corresponds well with ex-post reports. Agricultural growth led to 0.02% and 3.9% increases in real income for rural households and absentee landholders, respectively.

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    Article provided by Elsevier in its journal World Development.

    Volume (Year): 39 (2011)
    Issue (Month): 10 ()
    Pages: 1878-1887

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    Handle: RePEc:eee:wdevel:v:39:y:2011:i:10:p:1878-1887
    Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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    2. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
    3. Barbier, Edward B. & Burgess, J.C., 1996. "Economic analysis of deforestation in Mexico," MPRA Paper 12089, University Library of Munich, Germany.
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