Agri-Food Countersanctions and the Welfare of the Russian Population
https://doi.org/10.18288/1994-5124-2024-1-30-65
Abstract
The article examines the impact of countersanctions (the agri-food embargo) on the welfare of the Russian population. It employs a multi-stage econometric analysis which addresses the practical difficulties in making quantitative estimates of the effects of the countersanctions. The population was divided into three groups according to whether their welfare ranked high, medium, or low in the statistics from the twenty-third Russian Longitudinal Monitoring Survey. Evaluation via a multiple-choice model for clustered data indicated how the probability of belonging to one of the three classes of welfare depended upon consumer spending for goods that are subject to countersanctions. The loss of purchasing power (change in real consumer spending) that the three population groups underwent as a result of the countersanctions was then calculated. In order to do this, estimates of elasticities in domestic production of basic foods were arrived at based on a structural demand supply system. How much the food embargo contributed to consumer price increases for individual food items in 2014 was also calculated. The conclusion was that the embargo resulted in incremental price increases from 1.5 to 22 percentage points for particular goods. The population’s loss of wealth was assessed by combining the estimates of decreasing purchasing power with the estimates from the multiple choice model. Russian countersanctions enlarged the group with low welfare by a relatively minor 1.52 percent or 2.223 million people. The wealth of the medium group decreased by 1.16 percent, while the corresponding decrease for the high wealth group was an insignificant 0.36 percent.
Keywords
multiple choice model,
structural demand-supply system,
import substitution,
loss of purchasing power
JEL: С15, С35, С38, I31
Supporting agencies: The authors would like to express their gratitude to R. S. Grinberg, Scientific Director of the Institute of Economics of the Russian Academy of Sciences, for his support and to the reviewers whose comments allowed us to significantly improve this article, as well as to our colleagues for their valuable comments, suggestions and assistance in the preparation of the text.
About the Authors
D. V. Skrypnik
Central Economics and Mathematics Institute of the Russian Academy of Sciences; National Research University Higher School of Economics
Russian Federation
Russian Federation
Dmitry V. Skrypnik, Cand. Sci. (Econ.), Lead Research Fellow at the Laboratory of Mathematical Economics; Senior Research Fellow at the Laboratory of Climate Change Economics
47, Nakhimovskiy pr., Moscow, 117418
17, ul. Malaya Ordynka, Moscow, 119017
M. V. Shakleina
Lomonosov Moscow State University
Russian Federation
Russian Federation
Marina V. Shakleina, Cand. Sci. (Econ.), Associate Professor of the Department of Econometrics and Mathematical Methods of Economics, Moscow School of Economics
1–61, Leninskie Gory, Moscow, 119234
A. A. Zaytsev
National Research University Higher School of Economics
Russian Federation
Russian Federation
Alexander A. Zaytsev, Cand. Sci. (Econ.), Associate Professor of the School of World Economy, Head of the International Economic Research Department of the Center for Comprehensive European and International Studies (CCEIS)
17, ul. Malaya Ordynka, Moscow, 119017
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For citations:
Skrypnik D.V., Shakleina M.V., Zaytsev A.A. Agri-Food Countersanctions and the Welfare of the Russian Population. Economic Policy. 2024;19(1):30-65. (In Russ.) https://doi.org/10.18288/1994-5124-2024-1-30-65
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