nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒08‒29
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Price cap versus tariffs: The case of the EU-Russia gas market By Ehrhart, Karl-Martin; Schlecht, Ingmar; Wang, Runxi
  2. Beyond survival: farming chronicles, outlook and strategies for Ukrainian agriculture following the 2022 Russian Invasion By Bogonos, Mariia; Litvinov, V.; Martyshev, P.; Neyter, R.; Nivievskyi, O.; Piddubnyi, I.; Stolnikovich, H.
  3. Re-examining adaptation theory using Big Data: Reactions to external shocks By Greyling, Talita; Rossouw, Stephanié
  4. Civil societies' reactions of East- and Southeast Asian countries to the Russian war on Ukraine: Preliminary observations By Malitz, David M. (Ed.); Sriyai, Surachanee (Ed.)
  5. Effects of internal migration on labour market behaviour of families left-behind in Vietnam By David Granada Donato
  6. Home-made blues: Residential crowding and mental health in Beijing, China By Xize Wang; Tao Liu
  7. Climate, land productivity and agricultural adaptation in Ukraine By Fang, Ming; Jin, Songqing; Deininger, Klaus W.
  8. Georgian railway's experiences with belt and road initiative: Advantages and disadvantages By Gondauri, Davit

  1. By: Ehrhart, Karl-Martin; Schlecht, Ingmar; Wang, Runxi
    Abstract: To counter rising gas prices and corresponding Russian profits, many scholars point to import tariffs on Russian gas as a preferred policy instrument. While this makes sense in the case of oil, for the case of gas we observe the opposite. This is due to the structure of the EU-Russia gas market, where Russia holds a monopoly over the EU’s residual gas demand and the EU, if it would engage in joint procurement, has market power itself potentially acting as monopsony. However, it has not yet chosen to exercise its market power. Under these conditions, an external price cap for Russian gas can be considered to be the more appropriate policy instrument, because a price cap tends to take away economic incentives for Russia to use its market power, increasing gas prices through decreasing supply. Under such circumstances, we show that an external price cap is superior to a tariff in the sense that for any tariff there exists a price cap that makes both the EU and Russia better off. Consequently, the EU can always design a price cap that gives Russia the same welfare (so it is equally likely to accept), but makes the EU better off compared to imposing a tariff.
    Keywords: price cap,Russia,gas market,tariff,sanctions
    Date: 2022
  2. By: Bogonos, Mariia; Litvinov, V.; Martyshev, P.; Neyter, R.; Nivievskyi, O.; Piddubnyi, I.; Stolnikovich, H.
    Keywords: Crop Production/Industries, International Relations/Trade
    Date: 2022–08
  3. By: Greyling, Talita; Rossouw, Stephanié
    Abstract: During the global response to COVID-19, the analogy of fighting a war was often used. In 2022, the world faced a different war altogether, an unprovoked Russian invasion of Ukraine. Since 2020 the world has faced these unprecedented shocks. Although we realise these events' health and economic effects, more can be known about the happiness effects on the people in a country and how it differs between a health and a war shock. Additionally, we need to investigate if these external shocks do affect wellbeing, how they differ from one another, and how long it takes happiness to adapt to these shocks. Therefore, this paper aims to compare these two external shocks for ten countries spanning the Northern and Southern hemispheres to investigate the effect on happiness. By investigating the aforementioned, we also re-examine the adaptation theory and see whether it holds at the country level. We use a unique dataset derived from tweets extracted in real-time per country. We derive each tweet's underlying sentiment by applying Natural Language Processing (machine learning). Using the sentiment score, we apply algorithms to construct daily time-series data to measure happiness (Gross National Happiness (GNH)). Our Twitter dataset is combined with data from Oxford's COVID-19 Government Response Tracker. We find that in both instances, the external shocks caused a decrease in GNH. Considering both types of shocks, the adaptation to previous happiness levels occurred within weeks. Understanding the effects of external shocks on happiness is essential for policymakers as effects on happiness have a spillover effect on other variables such as production, safety and trust. Furthermore, the additional macro-level results on the adaptation theory contribute to previously unexplored fields of study.
    Date: 2022
  4. By: Malitz, David M. (Ed.); Sriyai, Surachanee (Ed.)
    Abstract: Undoubtedly, the war in Ukraine has far-reaching political and economic implications for many regions of the world, including East and Southeast Asia. The governments' reactions to the war have varied considerably ranging from fully supporting Ukraine in alliance with the United States and the European Union, as Japan and Korea have done, to the full backing of Russia by North Korea and Myanmar. That said, many governments in Southeast Asia remain neutral. Nonetheless, the responses to the war in the public spheres neither necessarily agree with their respective governments' stances, nor are they expected to be homogenous. This collection of articles serves as a preliminary attempt to take stock of the reactions of selected civil societies in East and Southeast Asian countries to Russia's invasion of Ukraine in February 2022 by analyzing the respective countries' public sentiment through press and social media. While the reactions of the publics of East and Southeast Asian societies have no direct influence on global society, they will shape their governments' future courses, where they can be expressed and where elections are held. As the long-term consequences of the geopolitical and economic shifts initiated by this conflict will only slowly become fully discernible, their analysis is of great interest. The papers have been presented and discussed at an online workshop jointly organized by the Institute of East Asian Studies at the University of Duisburg-Essen (IN-EAST), the German Institute of Japanese Studies, Tokyo (DIJ), the Chair of Transregional Southeast Asian Studies at Humboldt University Berlin, and the Faculty of Political Science, Chulalongkorn University, Bangkok.
    Keywords: Ukraine,East Asia,ASEAN,Southeast Asia,civil society,public opinions
    Date: 2022
  5. By: David Granada Donato
    Abstract: This document explores the implications of a migratory shock (in the form of household member(s) leaving) on the labour market behaviour of individuals left-behind in Vietnam. In addition, various coping mechanisms exhibited by each age group and their implications regarding sectoral labour allocation are further explored. Using panel data of 2,200 households in six waves and a DiD specification, the results suggest an increase in the likelihood of working for the elderly in agriculture that is most likely associated with higher labour invested in livestock activities. The results are robust to different specifications. Moreover, this coping mechanism of increased work is exhibited by those families that do not receive remittances and seems to last (even increase) for up to three periods after the migratory shock occurs. Interestingly, there is also evidence of diminishing returns on working probability when the share of migrants in the household increase.
    Keywords: Migration, Left-Behind, Labour Market, Agriculture
    JEL: J61 O15 P25 R23
    Date: 2022–01
  6. By: Xize Wang (National University of Singapore); Tao Liu (Peking University)
    Abstract: Although residential crowding has many well-being implications, its connection to mental health is yet to be widely examined. Using survey data from 1613 residents in Beijing, China, we find that living in a crowded place - measured by both square metres per person and persons per bedroom - is significantly associated with a higher risk of depression. We test for the mechanisms of such associations and find that the residential crowding-depression link arises through increased living space-specific stress rather than increased life stress. We also identify the following subgroups that have relatively stronger residential crowding-depression associations: females, those living with children, those not living with parents, and those living in non-market housing units. Our findings show that inequality in living space among urban residents not only is an important social justice issue but also has health implications.
    Date: 2022–07
  7. By: Fang, Ming; Jin, Songqing; Deininger, Klaus W.
    Keywords: Environmental Economics and Policy, Production Economics, Productivity Analysis
    Date: 2022–08
  8. By: Gondauri, Davit
    Abstract: Georgia's railway network is a key segment of the TRACECA, the shortest route from the Caspian Sea and Central Asia to the Black Sea and the Mediterranean Basin. Georgian Railway Corridor has a number of advantages over pipeline, alternative railways and auto transport. Changing the quality of crude oil does not occur during rail transportation, no pipelines for oil products. The Russian rail routes have a competitive disadvantage compared to Georgia as Novorossiysk Port is typically frozen in winter and operations are frequently delayed. The Russian and Iranian routes are significantly longer than the Georgian route, which increases costs, risks, and transportation time. The railway route running through Iran is less attractive than the Georgian route due to the tense political relations between Iran and the West. Railway transportation is considered safer and more environmentally friendly than road transportation. Expensive bulk transportation - in cases of bulk transportation, the railway is considered cheaper than the road.
    Keywords: Georgian railway,BRI,TRACECA,EVA,CAGR,GDP
    Date: 2022

This nep-tra issue is ©2022 by Maksym Obrizan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.