Perception and Action in a Conflict Zone: a Study of Rural Economy and Rural Life amidst Narcos in Northeastern Mexico

This paper analyzes the effect of drug cartel violence on farmers in Northeastern Mexico. Using tools from the psychology literature on risk perceptions, dual process theory and behavioral economics, we investigate factors correlating with fear among farmers, and how that fear is affecting rural life and production decisions. Farmers' actions in response to risk can be explained under the dual process approach, and the degree of emotional and deliberative response for each action is estimated. We find evidence that drug related violence in Mexico is affecting rural life and production decisions of small holder farmers