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The impact of tropical cyclones on food prices: evidence from Mexico

Author

Listed:
  • Jesús Arellano-González
  • Anna Karina Pérez-Peña
  • Mauricio Iván Acosta-García
  • Miriam Juárez-Torres

Abstract

This paper estimates the impact of tropical cyclones on food prices in Mexico using monthly panel data of the price indexes of different food categories and the method of local projections proposed by Jordà (2005). The impact of tropical cyclones is aproximated with estimates of the maximum sustained wind speed they reach as they impact Mexican cities. The results suggest a temporary increase in food prices following the impact of a tropical cyclone, driven primarily by increases in the prices of fresh vegetables and dry legumes. For example, a hurricane reaching a maximum sustained wind speed of 100 km/h is associated with an immediate 3.1% increase in fresh vegetable prices relative to a scenario without a cyclone. The results also suggest that food prices tend to be less sensitive to tropical cyclone impacts in cities with more developed infrastructure.

Suggested Citation

  • Jesús Arellano-González & Anna Karina Pérez-Peña & Mauricio Iván Acosta-García & Miriam Juárez-Torres, 2026. "The impact of tropical cyclones on food prices: evidence from Mexico," Working Papers 2026-04, Banco de México.
    • Handle: RePEc:bdm:wpaper:2026-04
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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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