From Maize to Haze: Agricultural Shocks and the Growth of the Mexican Drug Sector - Working Paper 355
We examine how commodity price shocks experienced by rural producers affect the drug trade in Mexico. Our analysis exploits exogenous movements in the Mexican maize price stemming from weather conditions in U.S. maize-growing regions, as well as export flows of other major maize producers. Using data on over 2,200 municipios spanning 1990-2010, we show that lower prices differentially increased the cultivation of both marijuana and opium poppies in municipios more climatically suited to growing maize. This increase was accompanied by differentially lower rural wages, suggesting that households planted more drug crops in response to the decreased income generating potential of maize farming. We also found impacts on downstream drug-trade outcomes, including the operations of drug cartels and killings perpetrated by these criminal groups. Our findings demonstrate that maize price changes contributed to the burgeoning drug trade in Mexico, and point to the violent consequences of an expanding drug sector.
When requesting a correction, please mention this item's handle: RePEc:cgd:wpaper:355. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Roodman)The email address of this maintainer does not seem to be valid anymore. Please ask David Roodman to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.