SOURCES OF CHANGE IN STATE-LEVEL AGRICULTURAL PRODUCTION IN MEXICO: IMPLICATIONS FROM THE PESO CRISIS OF 1994-1995

Abstract

sub-national level? Specifically, this paper looks at changes in state-level agricultural production3 that have taken place in Mexico’s thirty-two states from 1993 to 20004. This paper seeks to identify whether the changes in agricultural production over this period are attributable to national or local economic conditions. Shift-share analysis is used to analyze change in production. While this descriptive technique does not offer any clarification regarding causality (Sihite et al. 1990) between currency devaluations and shifts in agricultural production, it permits examination of how structural and competitive forces allow agricultural production at the state level to perform differently from national production. This is achieved by disaggregating the change in production into several smaller components. The primary benefit derived from this study is the determination of whether the changes in agricultural production have allowed states to exhibit comparative advantages. This would provide appropriate information to policy makers in their development of policies affecting the agricultural sector in their respective jurisdictions.