Wednesday, April 13, 2011


A recent story from the Christian Science Monitor has the following headline and subhead:
Mexico drug war's latest victim: the lime

The lime, a staple of Mexico's taco culture, quadrupled in price to almost $4 a kilo (2.2 pounds) in December and January, with drug traffickers blamed for meddling in the supply chain.
Immediately, skeptical brains should wonder: a four-fold increase in price because of a long-existing mafia problem? Hmmm. As it turns out, here's the most robust piece of statistical support for the initial assertion, which appears in the lead sentence:
Tania Tamayo's family of farmers coughs up 800 pesos ($66) to local drug traffickers for every truckload of limes they ship from the violent state of Michoacán, which supplies most of Mexico's lime market in the winter months.
I don't how many kilos of limes constitute a truckload, but I will offer the very conservative estimate of 500. Even if the entire burden of the extortion was passed off to the consumer (unlikely, though demand elasticity is like quite low, because what else are you going to out on your tacos?), the price of limes in that truck would not move more than a couple of pesos as a result. You'd need truckloads of roughly 20 kilos for such a tax to provoke such a drastic increase. In other words, the thesis presented in the headline seems to be crap, though it's more exciting than information about this year's crop yields.

Here's another "supporting" quote from a Mexican official:
"There are security costs that companies have had to absorb," acknowledges Beatriz Léycegui, deputy minister at Mexico's Economy Ministry.
Unfortunately for the strength of the piece, this quote doesn't say anything like the piece's thesis is, i.e. that insecurity has caused the price of limes to quadruple in Mexico City. Yes, insecurity imposes costs on businesses in Mexico. That is a well known and relatively banal point. That doesn't mean it causes basic commodities to quadruple in price.

Insecurity imposes a hell of a cost on the society, in ways both and measurable and hidden. But it is not the entire country, and it doesn't cause everything. Stories like these, which are probably just a function of people scrambling for new ways to cover a big story that doesn't have that many new angles, are doubly misleading, because they not only make the problem seem bigger than it is, they also distract us from the actual symptoms and the ways to combat them.

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