Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296958 
Year of Publication: 
2023
Series/Report no.: 
Working Papers No. 2023-02
Publisher: 
Banco de México, Ciudad de México
Abstract: 
In this paper, we estimate the effect of temperature shocks on the price of nine vegetables with a high contribution to Mexico's non core inflation. We utilize monthly panel data of the price index of each vegetable at the city level which we combine with high resolution weather data of the producing states. For every city, we construct a relevant temperature measure by weighting the different temperatures of its supplier states using historic production shares and distance. Our findings elicit a convex U-shaped relationship between temperature and vegetable prices and a high sensitivity of the latter to contemporaneous and lagged temperature shocks that occur within their growing period. Our findings also suggest that temperature shocks may have a detrimental effect on vegetable yields which may be an important driver of the impact on prices.
Subjects: 
Food Inflation
Weather Shocks
Vegetable Prices
Local Markets
JEL: 
E31
Q15
Q54
Document Type: 
Working Paper
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