The Effect of Rainfall Variation on Agricultural Households: Evidence from Mexico

This paper presents results of the rainfall impact on agricultural production and net income for rural households in Mexico using a two-year panel data set. We construct a metric on rainfall variation using historical data from weather stations across Mexico. The relationship between our rainfall measure and agricultural production indicates a consistent negative effect on maize production, specially for rain-fed and small farmers. Moreover, there is mixed evidence for non-maize crops production and non-significant rainfall impact for household’s net income.