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

Jesús Arellano-González, Anna Karina Pérez-Peña, Mauricio Iván Acosta-García and Miriam Juarez

No 2026-04, Working Papers from Banco de México

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.

Keywords: Food prices; Tropical cyclones; Local projections; Panel data (search for similar items in EconPapers)
JEL-codes: E31 Q15 Q54 (search for similar items in EconPapers)
Date: 2026-09
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2026-04

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