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The Household Response to the Mexican Peso Crisis

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  • David J. McKenzie

Abstract

November 2001 Household expenditure surveys are used to examine the effects of the Mexican peso crisis on household consumption and employment. The crisis is seen to have caused income and consumption to decline for all groups of society, although the relative impact differed by the education, industry and residence of the household head. The main smoothing mechanism was a change in the composition of consumption. Households are shown to have increased their expenditure share on certain food items even more than Engel’s law would predict, reducing their expenditure on luxury goods in order to do so. Labour supply is not found to have responded strongly to the crisis. Working Papers Index

Suggested Citation

  • David J. McKenzie, 2001. "The Household Response to the Mexican Peso Crisis," Working Papers 01017, Stanford University, Department of Economics.
    • Handle: RePEc:wop:stanec:01017
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    References listed on IDEAS

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    Cited by:

    1. Anna D'Souza & Dean Jolliffe, 2012. "Rising Food Prices and Coping Strategies: Household-level Evidence from Afghanistan," Journal of Development Studies, Taylor & Francis Journals, vol. 48(2), pages 282-299, August.
    2. David Mckenzie, 2002. "Are tortillas a Giffen Good in Mexico?," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-7.
    3. Jim Airola & Chinhui Juhn, 2008. "Wage Inequality in Post-Reform Mexico," Journal of Income Distribution, Ad libros publications inc., vol. 17(1), pages 110-134, March.
    4. David J. McKenzie, 2006. "Disentangling Age, Cohort and Time Effects in the Additive Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 473-495, August.
    5. Jim Airola & Chinhui Juhn, 2008. "Wage Inequality in Post-Reform Mexico," Journal of Income Distribution, Ad libros publications inc., vol. 17(1), pages 110-134, March.
    6. Marisol López-Romero & Stephanie Sophia Alva-Ruiz & José Alejandro Roque-Jiménez, 2025. "The Weight of Socioeconomic Factors in Mexican Households’ Consumption Adjustments Along the Business Cycle: A Comparative Analysis of the 1994 and 2008–2010 Crises," Social Sciences, MDPI, vol. 14(4), pages 1-14, March.
    7. repec:ebl:ecbull:v:15:y:2002:i:1:p:1-7 is not listed on IDEAS

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