From maize to haze: agricultural shocks and the growth of the Mexican drug sector

Available from: 
October 2013
Paper author(s): 
Kevin Thom (New York University)
Omar Garcia Ponce (New York University)
Oeindrila Dube (New York University)
Topic: 
Agricultural - Natural Resource Economics
Conflict, Crime and Violence
Year: 
2013

LACEA2013
We study the relationship between fluctuations in maize prices and the drug sector in Mexico. We exploit exogenous movements in the Mexican maize price stemming from weather shocks in the United States and fluctuations in the export volumes of other maize producing countries. Using data spanning 1990-2010, we fi…nd that lower prices induced a differential increase in the cultivation of both marijuana and opium poppies in municipios more climatically suited to growing maize. We also …find differential impacts on marijuana and opium seizures, along with drug crimes and killings by cartels. Our fi…ndings demonstrate that maize price changes contributed to the rising drug trade in Mexico, and point to the violent consequences of an expanding drug sector.

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Research section: 
Lacea 2013 annual meeting
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