The Consumer Response to the Mexican Peso Crisis
David McKenzie ()
Economic Development and Cultural Change, 2006, vol. 55, issue 1, 139-72
Household expenditure surveys are used to examine the effects of the Mexican peso crisis on household consumption. The main smoothing mechanism was a change in the composition of consumption, with households reducing semidurable spending to maintain basic food levels. This article provides a method for disentangling income, price, demographic, and crisis adjustment effects and finds that households increased their expenditure share on certain basic food items even more than Engel's law and relative price changes would predict. I hypothesize that this reflects the use of semidurables as an adjustment mechanism and show that this leads to changes in the shape and position of the Engel curves. However, the article cannot fully rule out the alternative explanation that the reduction in semidurables reflects households reducing semidurable stocks due to a perceived fall in permanent income from the crisis.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
Access to the online full text or PDF requires a subscription.
Journal Article: The Consumer Response to the Mexican Peso Crisis (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ucp:ecdecc:y:2006:v:55:i:1:p:139-72
Access Statistics for this article
More articles in Economic Development and Cultural Change from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().