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How Much Do Counter-Sanctions Cost: Well-Being Analysis

Author

Listed:
  • Volchkova, N.

    (New Economic School, Moscow, Russia)

  • Kuznetsova, P.

    (nstitute for Social Analysis and Prediction at Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia)

Abstract

In this paper we provide a quantitative assessment of the consequences of countersanctions introduced by the Russian government in 2014 in response to sectoral restrictive measures initiated by a number of developed countries. Commodity groups that fell under countersanctions included meat, fish, dairy products, fruit and vegetables. Applying the basic partial equilibrium analysis to the data from several sources, including Rosstat, Euromonitor, UN Comtrade, industry reviews etc., we obtain that total consumers' loss in 2018 amounts to 445 bln Rub or 3000 Rub per year for each Russian citizen. Producers capture 84% of this amount, importers - 3%, while deadweight loss amounts to 13%. Trade diversion ensured substantial redistribution of market share to Belarus. The gain of Belarussian importers of dairy products and cheese is especially impressive - up to 90% of total importer's gains in these markets.

Suggested Citation

  • Volchkova, N. & Kuznetsova, P., 2019. "How Much Do Counter-Sanctions Cost: Well-Being Analysis," Journal of the New Economic Association, New Economic Association, vol. 43(3), pages 173-183.
  • Handle: RePEc:nea:journl:y:2019:i:43:p:173-183
    DOI: 10.31737/2221-2264-2019-43-3-9
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    References listed on IDEAS

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    1. David Abler, 2010. "Demand Growth in Developing Countries," OECD Food, Agriculture and Fisheries Papers 29, OECD Publishing.
    2. Assem Abu Hatab, 2016. "Demand relationships in orange exports to Russia: a differential demand system approach focusing on Egypt," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-16, December.
    3. Matthias Staudigel & Rebecca Schröck, 2015. "Food Demand in Russia: Heterogeneous Consumer Segments over Time," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 615-639, September.
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    Cited by:

    1. Loginova, Daria, 2022. "Assessing the Short-term Effect of Exchange Rate Liberalisation on Food Import Prices: The Regression Discontinuity in Time Employed for Russian Food Markets in 2014," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 3(3), September.
    2. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    3. Daria Loginova & Judith Irek, 2022. "Russian meat price transmission and policy interventions in 2014," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-28, December.

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    More about this item

    Keywords

    counter-sanction; trade diversion; well-being analysis; consumer surplus; producer surplus; deadweight loss;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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