IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_12869.html

Russia’s Wartime Economy: Measuring Regional Inequalities from Outer Space

Author

Listed:
  • Irakli Barbakadze
  • Jan Fidrmuc
  • Martin Hulényi
  • Ketevani Kapanadze

Abstract

We study Russia's February 2022 full-scale invasion of Ukraine as a natural experiment to determine how sudden disruptions to international market access reshape sub-national economic inequalities. Using remotely-sensed nighttime lights as a proxy for economic activity, we estimate the economic effects of the war at the national and regional levels. We find that Russia experienced an overall economic slowdown after the start of the full-scale invasion. Regions in Western and North-Western Russia experienced significantly larger economic contractions, while Southern and Southeastern regions exhibit relative improvements in performance. These findings suggest that sanctions, a shift toward non-Western markets, and increased military production, have driven significant regional changes in Russia’s economy and urban structure.

Suggested Citation

  • Irakli Barbakadze & Jan Fidrmuc & Martin Hulényi & Ketevani Kapanadze, 2026. "Russia’s Wartime Economy: Measuring Regional Inequalities from Outer Space," CESifo Working Paper Series 12869, CESifo.
    • Handle: RePEc:ces:ceswps:_12869
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/cesifo1_wp12869.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kiet Duong & Toan Huynh & Anh Phan & Nam Vu, 2024. "From Russia with Love: International Risk-sharing, Sanctions, and Firm Investments," Working Papers 119, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    2. Boungou, Whelsy & Yatié, Alhonita, 2022. "The impact of the Ukraine–Russia war on world stock market returns," Economics Letters, Elsevier, vol. 215(C).
    3. Vasily Astrov & Richard Grieveson & Artem Kochnev & Michael Landesmann & Olga Pindyuk, 2022. "Possible Russian Invasion of Ukraine, Scenarios for Sanctions, and Likely Economic Impact on Russia, Ukraine, and the EU," wiiw Policy Notes 55, The Vienna Institute for International Economic Studies, wiiw.
    4. Andrey Yushkov & Michael Alexeev, 2024. "Russian regions in wartime: fiscal and economic effects of the Russo-Ukrainian war," Post-Soviet Affairs, Taylor & Francis Journals, vol. 40(4), pages 313-325, July.
    5. John Gibson & Susan Olivia & Geua Boe‐Gibson, 2020. "Night Lights In Economics: Sources And Uses," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 955-980, December.
    6. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 799-858.
    7. Yan Wang & Yinyin Xu, 2026. "Illuminating Insights: The Impact of Chinese Infrastructure Projects on Economic Activities in Sub‐Saharan Africa," Journal of Regional Science, Wiley Blackwell, vol. 66(1), pages 229-243, January.
    8. Madina Khudaykulova & He Yuanqiong & Akmal Khudaykulov, 2022. "Economic Consequences and Implications of the Ukraine-Russia War," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 8(4), pages 44-52, May.
    9. Lessmann, Christian & Seidel, André, 2017. "Regional inequality, convergence, and its determinants – A view from outer space," European Economic Review, Elsevier, vol. 92(C), pages 110-132.
    10. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    11. David Audretsch & Paul P. Momtaz & Hanna Motuzenko & Silvio Vismara, 2023. "The Economic Costs of the Russia-Ukraine War: A Synthetic Control Study of (Lost) Entrepreneurship," Papers 2303.02773, arXiv.org.
    12. Vasily Astrov & Artem Kochnev & Vincent Stamer & Feodora Teti, 2024. "The Russian Economy Amidst the War and Sanctions," Russia Monitor 1, The Vienna Institute for International Economic Studies, wiiw.
    13. Yuriy Gorodnichenko & Iikka Korhonen & Elina Ribakova, 2025. "War-induced economic convergence in Russian regions," Working Paper Series WP25-21, Peterson Institute for International Economics.
    14. Solanko, Laura, 2024. "Where do Russia's mobilized soldiers come from? Evidence from bank deposits," BOFIT Policy Briefs 1/2024, Bank of Finland Institute for Emerging Economies (BOFIT).
    15. Kristian Behrens, 2024. "Casualties of border changes: evidence from nighttime lights and plant exit," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 39(118), pages 359-406.
    16. Iana Liadze & Corrado Macchiarelli & Paul Mortimer‐Lee & Patricia Sanchez Juanino, 2023. "Economic costs of the Russia‐Ukraine war," The World Economy, Wiley Blackwell, vol. 46(4), pages 874-886, April.
    17. Alexey Bessudnov, 2023. "Ethnic and regional inequalities in Russian military fatalities in Ukraine: Preliminary findings from crowdsourced data," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 48(31), pages 883-898.
    18. Catherine Hausman & David S. Rapson, 2018. "Regression Discontinuity in Time: Considerations for Empirical Applications," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 533-552, October.
    19. Luis R. Martínez, 2022. "How Much Should We Trust the Dictator’s GDP Growth Estimates?," Journal of Political Economy, University of Chicago Press, vol. 130(10), pages 2731-2769.
    20. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    21. Christian Düben & Melanie Krause, 2021. "Population, light, and the size distribution of cities," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 189-211, January.
    22. Miguel Ángel Almazán‐Gómez & Carlos Llano & Julián Pérez & Daniel Rauhut, 2024. "Socioeconomic impacts of Russian invasion of Ukraine: A multiregional assessment for Europe," Journal of Regional Science, Wiley Blackwell, vol. 64(2), pages 333-354, March.
    23. Duong, Kiet Tuan & Huynh, Luu Duc Toan & Phan, Anh Dang Bao & Vu, Nam T., 2024. "From Russia with love: International risk-sharing, sanctions, and firm investments," Economics Letters, Elsevier, vol. 244(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duong, Kiet Tuan & Huynh, Luu Duc Toan & Nguyen, Quan M.P., 2025. "Sanctions and inventories: Evidence from Russian energy firms," Energy Economics, Elsevier, vol. 146(C).
    2. Gibson, John & Olivia, Susan & Boe-Gibson, Geua & Li, Chao, 2021. "Which night lights data should we use in economics, and where?," Journal of Development Economics, Elsevier, vol. 149(C).
    3. Sebastian Ottinger & Elizaveta Zelnitskaia, 2025. "Post(-Mongol) Roads to Path Dependence," CERGE-EI Working Papers wp807, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Yit Wey Liew & Muhammad Habibur Rahman & Audrey Kim Lan Siah, 2026. "Colonial origins of agglomeration: Evidence from Malayan rail stations," Economic History Review, Economic History Society, vol. 79(1), pages 221-246, February.
    5. van der Weide, Roy & Blankespoor, Brian & Elbers, Chris & Lanjouw, Peter, 2024. "How accurate is a poverty map based on remote sensing data? An application to Malawi," Journal of Development Economics, Elsevier, vol. 171(C).
    6. Krantz, Sebastian, 2024. "Mapping Africa's infrastructure potential with geospatial big data and causal ML," Kiel Working Papers 2276, Kiel Institute for the World Economy.
    7. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).
    8. Haggard, Stephan & Kim, Kyoochul & Lee, Munseob, 2026. "Studying economic black holes: Lessons from North Korea," World Development, Elsevier, vol. 201(C).
    9. Shapiro, Daniel & Oh, Chang Hoon & Zhang, Peng, 2023. "Nighttime lights data and their implications for IB research," Journal of International Management, Elsevier, vol. 29(5).
    10. Arbatli, Cemal Eren & Gomtsyan, David, 2021. "Sectarian aid, sanctions and subnational development," European Economic Review, Elsevier, vol. 139(C).
    11. Bonggeun Kim & John Gibson & Geua Boe‐Gibson, 2024. "Measurement errors in popular night lights data may bias estimated impacts of economic sanctions: Evidence from closing the Kaesong Industrial Zone," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 375-389, January.
    12. Gregor Pfeifer & Fabian Wahl & Martyna Marczak, 2018. "Illuminating the World Cup effect: Night lights evidence from South Africa," Journal of Regional Science, Wiley Blackwell, vol. 58(5), pages 887-920, November.
    13. Qiao, Chengzhi, 2024. "Financial risks and economic costs of trade sanctions," Finance Research Letters, Elsevier, vol. 69(PA).
    14. Jaqueson K Galimberti & Stefan Pichler & Regina Pleninger, 2023. "Measuring Inequality Using Geospatial Data," The World Bank Economic Review, World Bank, vol. 37(4), pages 549-569.
    15. John Gibson, 2021. "Better Night Lights Data, For Longer," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(3), pages 770-791, June.
    16. Matthieu Charpe, 2023. "Convergence heterogeneity at the local level in sub‐Saharan Africa," Papers in Regional Science, Wiley Blackwell, vol. 102(2), pages 273-305, April.
    17. Han, Yi & Wu, Mingqin, 2024. "Inter-regional barriers and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 167(C).
    18. Liu, Honglin & Liu, Qiao & Liu, Yufei, 2023. "The world price of macro opacity: Through the lens of nighttime satellites," Economics Letters, Elsevier, vol. 228(C).
    19. Giorgio Chiovelli & Stelios Michalopoulus & Elias Papaioannou & Tanner Regan, 2025. "Illuminating the Global South," Working Papers 2025-009, The George Washington University, The Center for Economic Research.
    20. Omoniyi Alimi & Geua Boe-Gibson & John Gibson, 2022. "Noisy Night Lights Data: Effects on Research Findings for Developing Countries," Working Papers in Economics 22/12, University of Waikato.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_12869. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.