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The impact of foreign trade shocks on well-being of Russian households: Microsimulation approach


  • Denisova, Irina

    (Lomonosov Moscow State University; New Economic School, Moscow, Russian Federation)

  • Varioshkin, Nikita

    (New Economic School, Moscow, Russian Federation)


In recent years, there have been significant fluctuations in world prices for essential goods, many of which have a significant share in the consumption basket of households. In this study, we analyze how fluctuations in world wheat prices affect the well-being of Russian households. We provide estimates of average welfare losses and of welfare losses in different parts of welfare distribution. We also identify which socio-demographic groups bear the brunt of such price shocks. For evaluation, a microsimulation approach to model the expenditure part of household budgets is used. The empirical basis is the data of the Russian Longitudinal Monitoring Survey (RLMS) for 2020. When modeling a 50% rise in prices for bread, flour and pasta, the average losses amounted to 2.9% of total household expenditures, the largest losses, 5.5% of total expenditures, fall on households in the first decile. Those living in rural areas or urban-type settlements, as well as households headed by a female pensioner, suffer losses at the level of 3% of total household expenses. Families with children are not among the most vulnerable groups with rising prices for bread, flour and pasta.

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  • Denisova, Irina & Varioshkin, Nikita, 2022. "The impact of foreign trade shocks on well-being of Russian households: Microsimulation approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 68, pages 73-92.
  • Handle: RePEc:ris:apltrx:0459

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    More about this item


    ood prices; foreign trade; microsimulations; RLMS; Russia;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs


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