Where is the setting (place) of The Pearl stated?

The setting of The Pearl is a small Mexican fishing village called La Paz. In Spanish, La Paz means "peace," which is somewhat ironic given that Kino's discovery of the precious pearl of the title brings him and his family anything but.
The setting is important to the story as it allows Steinbeck to explore a number of themes, such as the poverty of the fishing community and the racial tensions that exist between the social elite, descended from the Spaniards who conquered this part of the world, and the indigenous population, to which Kino and his family belong. The elite, represented by the doctor, look down on indigenous folk, seeing them as racially and culturally inferior. That explains why the doctor refuses to give Kino a fair price for his pearl and tries to steal it instead. He and his ancestors have been exploiting the indigenous people for centuries, and he's determined to keep this ghastly tradition alive for as long as possible.