Uneven Resilience and Recovery During War: Municipality-Level Evidence from Ukraine

The Russian invasion of Ukraine in 2022 caused an unprecedented economic shock, yet reliable measures of economic activity during wartime are scarce, particularly at the subnational level. Official GDP statistics are available only at the national level and with substantial delays, while no systematic estimates exist on how the war affected economic activity across regions. This paper provides the first subnational assessment of the economic impact of the war in Ukraine by exploiting satellite-based nighttime light data as a proxy for local economic activity. Using annual VIIRS Day/Night Band data for the period 2014–2024, we analyze changes in nighttime light intensity across Ukrainian urban areas and relate them to geographic exposure to armed conflict events recorded by ACLED. We estimate two-way fixed effects models that exploit within-urban area variation over time and spatial variation in distance to conflict locations following the escalation of the war in 2022. At the national level, we document a strong correlation between official GDP and nighttime lights, supporting the validity of the proxy in the Ukrainian context. Our results reveal a pronounced spatial gradient in wartime economic disruption. Urban areas located closer to conflict events experienced significantly larger declines in nighttime light intensity after 2022, while economic losses attenuate sharply with distance and largely dissipate beyond approximately 50 kilometers. These findings highlight the highly localized nature of wartime economic damage and underscore the value of satellite data for measuring economic activity in settings characterized by data gaps, conflict, and institutional disruption.