Yalew, Amsalu Woldie; Nechi o , Vic o ; Fe a i, Emanuele
A icle
The implica ions o he Russian in asion o Uk aine o
A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics (BAE)
P o ided in Coope a ion wi h:
Fi enze Uni e si y P ess
Sugges ed Ci a ion: Yalew, Amsalu Woldie; Nechi o , Vic o ; Fe a i, Emanuele (2024) : The
implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia,
Bio-based and Applied Economics (BAE), ISSN 2280-6172, Fi enze Uni e si y P ess, Flo ence, Vol. 13,
Iss. 3, pp. 225-243,
h ps://doi.o g/10.36253/bae-15364
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/321797
S anda d-Nu zungsbedingungen:
Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen
Zwecken und zum P i a geb auch gespeiche und kopie we den.
Sie dü en die Dokumen e nich ü ö en liche ode komme zielle
Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich
machen, e eiben ode ande wei ig nu zen.
So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen
(insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en,
gel en abweichend on diesen Nu zungsbedingungen die in de do
genann en Lizenz gewäh en Nu zungs ech e.
Te ms o use:
Documen s in EconS o may be sa ed and copied o you pe sonal
and schola ly pu poses.
You a e no o copy documen s o public o comme cial pu poses, o
exhibi he documen s publicly, o make hem publicly a ailable on he
in e ne , o o dis ibu e o o he wise use he documen s in public.
I he documen s ha e been made a ailable unde an Open Con en
Licence (especially C ea i e Commons Licences), you may exe cise
u he usage igh s as speci ied in he indica ed licence.
h ps://c ea i ecommons.o g/licenses/by/4.0/
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Bio-based and Applied Economics
BAE
© 2024 Au ho (s). Open access a icle published, excep whe e o he wise no ed, by Fi enze Uni e si y P ess unde CC-BY-4.0 License
o con en and CC0 1.0 Uni e sal o me ada a.
Fi enze Uni e si y P ess | www. up ess.com/bae
Ci a ion: Yalew, A.W., Nechi o , V., &
Fe a i, E. (2024). The implica ions o he
Russian in asion o Uk aine o A ican
economies: A CGE analysis o E hio-
pia. Bio-based and Applied Economics
13(3): 225-243. doi: 10.36253/bae-15364
Recei ed: No embe 19, 2023
Accep ed: Ma ch 11, 2024
Published: Oc obe 16, 2024
Da a A ailabili y S a emen : All el-
e an da a a e wi hin he pape and i s
Suppo ing In o ma ion iles.
Compe ing In e es s: The Au ho (s)
decla e(s) no con lic o in e es .
Edi o : F ancesco Pagliacci, Valen ina
Raimondi, Luca Sal a ici
ORCID
AWY: 0000-0002-1778-8477
VN: 0000-0001-8034-4070
EF: 0000-0003-0031-7190
The implica ions o he Russian in asion o
Uk aine o A ican economies: A CGE analysis
o E hiopia
Amsalu Woldie Yalew1,2,*, Vic o Nechi o 3, Emanuele Fe a i3
1 Ca’ Fosca i Uni e si y o Venice, Via To ino 155, 30172 Venice, I aly
2 Eu o-Medi e anean Cen e on Clima e Change (CMCC), Via della Libe a 12, 30175
Venice, I aly
3 Eu opean Commission, Join Resea ch Cen e (JRC), Se ille, Spain
*Co esponding au ho . E-mail: amsaluwoldie[email p o ec ed]
Abs ac . The Russian in asion o Uk aine con ibu ed o soa ing wo ld ma ke p ices
o many commodi ies wi h se e e epe cussions o many A ican coun ies. This s udy
examines he implica ions o he 2022 wo ld ma ke p ice inc eases o whea , uels,
and e ilize s o E hiopia. Using a compu able gene al equilib ium (CGE) model, he
s udy shows nega i e impac s on GDP, wage a es, and households’ consump ion in he
coun y. The e ec s o e ilize and pe oleum p ice changes a e no able and unequal
ac oss p oduc ion sec o s. Wi h inc easing impo p ices o ino ganic e ilize s, c op
g owing ac i i ies subs i u e ino ganic e ilize s wi h animal manu e educing he
use o manu e as cooking uel. The e ec s on u ban households a e mo e se e e han
he e ec s on u al households. Policies suppo ing bio uels and biogas diges e s may
dampen he ad e se e ec s s emming om pe oleum p ice su ges.
Keywo ds: Commodi y ma ke s, T ade, CGE, Russia-Uk aine wa , E hiopia
JEL Codes: C68, F10, L66.
1. INTRODUCTION
The Russian in asion o Uk aine and he subsequen wa ha e caused a
wide- ange o c ises wi h sho - and long- e m implica ions o he global
economy. The epe cussions o he wa ange om dis up ion o global com-
modi y ma ke s o long- e m e ec s on he p ospec s o globaliza ion and
geopoli ical o de (Ga icano e al., 2022; Ru a, 2022). The dis up ions in he
global supply chains inc eased he synch oniza ion o g ain, ene gy, and e -
ilize p ices a he global le el (Ihle e al., 2022). This esul ed in con agion
ac oss ood and non- ood ma ke s which would es ic he abili y o consum-
e s o mi iga e he ad e se e ec s o ood and ene gy p ice spikes by eso ing
o inexpensi e al e na i es (Ihle e al., 2022). The dis up ions in global ood,
e ilize and ene gy ma ke s h ea en o u he inc ease he numbe o poo
and malnou ished people, especially in de eloping coun ies (Guan e al.,
2023; Osenda p e al., 2022).
226
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
The ype and size o he e ec s will di e ac oss
coun ies as hese a e de e mined by he ade, p o-
duc ion and consump ion s uc u es, and go e nmen
esponses in di e en coun ies (Ga icano e al., 2022).
I is he e o e necessa y o unde s and how he wa in
Uk aine a ec s indi idual economies (Ru a, 2022) o
unde pin coun y-speci ic policy measu es inc easing
he esilience o each economy.
The sho - and long- e m implica ions o he wa in
Uk aine o A ican coun ies a e wo isome (Badiane
e al., 2022; UNCTAD, 2022). F om he 107 economies
highly exposed o he shocks due he wa in Uk aine, 41
a e in A ica (UN, 2022a). Since many A ican coun ies
a e ne impo e s o ce eals, ege able oils and e ilize s,
he implica ions o he wa o ood secu i y a e subs an-
ial (Badiane e al., 2022). Highe impo p ices ep esen
nega i e e ms-o - ade o A ican economies in which
poo households ace he ha des hi (A nd e al., 2008).
Besides, many A ican coun ies ha e limi ed iscal and
bo owing capaci ies o espond o global ene gy and
ood ma ke c ises, pa icula ly a e a ious spending
measu es and igh ening o mone a y policies o cope
wi h and eco e om he COVID-19 pandemic c isis.
The e ec s on E hiopia a e o pa icula in e -
es (Diao e al., 2022) as i depends almos en i ely on
impo ed pe oleum and ino ganic e ilize s (Mengis u
e al., 2019); he wo commodi ies ha el he highes
and immedia e e ec s o he wa on Uk aine in 2022
(Ru a, 2022; Wo ld Bank, 2023). E hiopia has also been
subjec o mul iple shocks in ecen yea s (e.g., COV-
ID-19 pandemic, d ough s, and a med con lic s) lea ing
he coun y wi h li le iscal space o cushion he ad e se
spillo e e ec s om he Russian in asion o Uk aine.
This s udy examines he economy-wide implica ions
o changes in wo ld p ices o h ee commodi ies– whea ,
e ilize s, and pe oleum oil– highly signi ican o he
E hiopian ood and ene gy sys ems. I applies a compu -
able gene al equilib ium (CGE) model, which acks he
di ec and induced economy-wide e ec s o he changes
in wo ld p ices o he h ee majo E hiopian impo s.
Quan i ying such e ec s and unde s anding hei ans-
mission mechanisms would p o ide lessons o possible
policy esponses in he ad en o simila inciden s wi h
implica ions o global ma ke s in he u u e.
The s udy explici ly ep esen s he sec o s and com-
modi ies linked o ag i ood and ene gy sys ems and
applied case-speci ic nes ing o p oduc ion and con-
sump ion unc ions o in es iga e he implica ions o
wo ld ma ke p ices changes o he ood-ene gy nexus
in E hiopia and o he low-income coun ies. The model
combined p oduc ion nes ing ea u es which a e com-
mon in equilib ium model applica ions wi h de ailed
ep esen a ion o ene gy (e.g., Feng & Zhang, 2018;
Hu agalung e al., 2019) and ag icul u e (e.g., He el e
al., 1996; B unelle e al., 2015) sec o s. The p oduc ion
nes s allow o he impe ec subs i u ion be ween di e -
en uels (pe oleum uels, elec ici y, and biomass uels)
and, o g owing c ops, limi ed subs i u ion be ween
o ganic (animal manu e) and ino ganic (chemical) e -
ilize s, and hen be ween composi e e ilize and land.
The s udy con ibu es o he li e a u e on he ans-
mission o shocks om global- o-domes ic ma ke s and
hei economy-wide impac s (e.g., A nd e al., 2008;
Dillon & Ba e , 2016; on A nim e al., 2018), and he
ood-ene gy nexus (e.g., Mekonnen e al., 2017) in A i-
can coun ies.
The emainde o he pape is o ganized as ollows.
Sec ion 2 p esen s he ma e ials and me hods o he
s udy. Sec ion 3 p esen s he esul s ollowed by Sec ion
4 o he discussions. Sec ion 5 concludes he pape .
2. MATERIALS AND METHODS
Gi en hei de ailed co e age o commodi y and
ac o ma ke s, and ha o he ci cula low o income,
CGE models a e widely applied o many ade, de el-
opmen , and iscal policy issues o de eloping coun-
ies (De a ajan & Robinson, 2013). Single-coun y
CGE modelling app oach pa icula ly helps o assess
he di ec and indi ec e ec s o exogenous changes
on di e en pa s o he economy by comp ehensi e-
ly accoun ing o he coun y-speci ic in e linkages
be ween p oduc ion and consump ion, and ag i ood and
ene gy sec o s.
2.1. Model desc ip ion
The Dynamic Equilib ium Model o Economic
De elopmen , Resou ces and Ag icul u e (DEMET-
RA) model is an ex ension o he STAGE_DEV model
(McDonald e al., 2016). DEMETRA is a single-coun y
ecu si e-dynamic small open-economy CGE model.
The model allows o an ad anced cha ac e iza ion o
impac s o shocks a di e en le els: sec o al (ou pu and
p oduc ion cos s), household (income and consump ion
demand), ac o s (demand and income), and na ional
(GDP, employmen , and ade). DEMETRA inco po a es
beha io al equa ions ha ep esen he economic ela-
ionships in de eloping coun ies: nes ed p oduc ion and
consump ion unc ions and ac o ma ke segmen a ions
(JRC, 2021; McDonald e al., 2016). The model and he
unde lying da abase ha e been applied in s udies ocus-
ing on ood secu i y and ag icul u al policies in de el-
227
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
oping coun ies (Nechi o e al., 2021; Boulange e al.,
2022; N ah e al., 2024). Fu he in o ma ion and docu-
men a ion abou he model a e a ailable in JRC (2021).
2.2. Model calib a ion
The model assumes pe ec compe i ion in ac o
and commodi y ma ke s. The e o e, bo h he selle s and
buye s in he ac o and commodi y ma ke s ake he
p ices de e mined by ma ke supply and demand o ces
as gi en. E hiopia is a small open-economy and hus i s
domes ic p ice changes do no a ec wo ld ma ke p ices
whe eas wo ld ma ke p ice changes (o he coun y’s
expo s and impo s) a e exogenous. In line wi h he
A ming on assump ion (A ming on, 1969), he impo -
ed and domes ically p oduced a ie ies o commodi ies
a e impe ec subs i u es. The elas ici ies used in p oduc-
ion, commodi y, and households’ consump ion nes s a e
ad hoc alues (summa ized in Table A2 in he appendix)
wi hin he ange ound in he exis ing li e a u e ele an
o low-income coun ies and inc ease om ag icul u e
o se ice sec o s (e.g., Lo g en, 1994; Diao e al., 2012;
He el & an de Mensb ugghe, 2019).
The p oduc ion ac i i ies a e disagg ega ed in o
sub p ocesses cap u ed by nes ed cons an elas ici y o
subs i u ion (CES) and Leon ie p oduc ion unc ions,
which combine p ima y ac o s and in e media e inpu s
a di e en s ages. The subs i u ions a e d i en by ela-
i e p ice changes. The decisions o p oduc ion ac i i ies
a di e en s ages a e d i en by cos minimiza ion goals
cons ained by ma ke p ices (o inpu s and ou pu s)
and p oduc ion echnology. The p oduc ion echnol-
ogy nes o ac i i ies (Figu e A1) is lexible and allows
subs i u ion possibili ies among di e en ac o s and
in e media e inpu s a di e en le els. The op le el is
speci ied as Leon ie agg ega ion o a composi e in e -
media e inpu , and a composi e alued-added-ene gy
inpu , assuming a pe ec complemen a i y be ween he
wo agg ega es. The composi e (agg ega e) in e medi-
a e inpu is a Leon ie agg ega ion o non-ene gy and
non- e ilize in e media e inpu s. The composi e al-
ue-added is a CES agg ega ion o a composi e labo (o
unskilled, semi-skilled, and skilled), a composi e capi al
(o li es ock, ag icul u al capi al, non-ag icul u al capi-
al), and a composi e land (o i iga ed o non-i iga ed,
and composi e e ilize ) inpu s. The composi e ene gy
inpu is a CES agg ega e o ene gy commodi ies (elec-
ici y, ossil uels, and bioene gy – uelwood in ho els o
bio uels in anspo ). Such nes ing be ween ene gy and
ac o inpu s esembles ecen CGE applica ions (e.g.,
Feng & Zhang, 2018; Hu agalung e al., 2019). The alue-
added nes o c op-g owing ac i i ies comp ises a e i-
lize nes which is a CES agg ega ion o animal manu e
(domes ic) and ino ganic (impo ed) e ilize s. This nes
be e ep esen s he con ex s in he coun y (Me a e ia
e al., 2011; AgSS, 2020) and allows o subs i u abili y
be ween hem due o ela i e p ice changes which would
no be allowed wi hin he Leon ie s uc u e. In he
ecen i e ha es seasons, abou 45-50% and 11-13% o
c op a ea cul i a ed by smallholde a me s in E hiopia
applies syn he ic (ino ganic) and na u al (o ganic) e i-
lize s (AgSS, 2020). The composi e e ilize (o o ganic
and ino ganic ypes) is hen ea ed as an impe ec
subs i u e o c opland. The nes ing s uc u e o c op
ac i i ies is also ela ed o p e ious esea ch on ac o
subs i u ion in ag icul u e (e.g., Binswange , 1974; He -
el, 1989; Ali & Pa ikh, 1992; He el e al., 1996; Dal on
e al., 1997), and in ag icul u al land-use (e.g., B unelle
e al., 2015; Lunga ska e al., 2023).
Households maximize hei consump ion u ili y
subjec o a nes ed S one-Gea y (o Linea Expendi u e
Sys em – LES – demand) and CES unc ions (Figu e
A2), and o income cons ain s. In he S one-Gea y/LES
u ili y unc ion, a he op o he u ili y nes , household
consump ion demand consis s o ‘subsis ence’ demand
and ‘disc e iona y’ demand. The commodi ies in he
LES demand unc ion a e de ined as ‘b oad’ commod-
i y g oups, which a e ei he agg ega es o ‘na u al’ com-
modi ies o indi idual ‘na u al’ commodi ies ha a e
deemed su icien ly dis inc i e as o jus i y he assump-
ion ha hey a e cha ac e ized by ha ing a dis inc le el
o ‘subsis ence’ demand (JRC, 2021). The second le el
o he u ili y unc ions nes is de ined wi h CES p e e -
ences. I consis s o six commodi y ca ego ies ep esen -
ing ce eals (6 commodi ies), li es ock (7 commodi ies
including ish), ene gy (8 commodi ies in which he 2
a e elec ici y om o -g id and g id sou ces), p ocessed
ood and be e ages (4 commodi ies), swee s (suga and
honey), and anspo se ices (equines and mode n
anspo se ices). Two o he ene gy commodi ies
(c op esidues and biogas), and one o he anspo se -
ices ( om equines) a e consumed only by u al house-
holds. Addi ionally, animal manu e, c op esidues, and
bio uel a e by-p oduc s om li es ock, c ops, and suga
manu ac u ing.
Households’ consump ion expendi u e is a esidual
o household income a e deduc ing di ec (income)
axes, sa ings, and hei ne ans e s o o he ins i u-
ions (i.e., o he o he household g oup, o en e p ises,
o he go e nmen , and o he es o he wo ld). House-
holds’ income sou ces include ac o s o p oduc ion hey
own and supply, and ne ans e s om he es o ins i-
u ions. Households’ consump ion demand is he e o e
expec ed o be a ec ed by changes in bo h households’
228
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
income and commodi y p ices.
Fac o s can be mobile ac oss ac i i ies (labo and
land ac o s1) o ac i i y-speci ic (capi al and li es ock
ac o s). Fo he mobile ac o s, lexible a e age econ-
omy-wide wage a es equa e hei demand and supplies
whe eas lexible ac i i y-speci ic wage dis o ion ac o s
(p opo ions) equilib a e he ma ke s o ac i i y-speci ic
ac o s. The supplies o p ima y ac o s o p oduc ion a e
ixed a hei base le els. Go e nmen and o eign sa -
ings a e ixed a hei base le els. The ex e nal ( o eign
sec o ) balance is main ained by a lexible exchange a e.
All ax a es a e ixed a he benchma k le el.
2.3. Model da abase
The CGE model is calib a ed o a modi ied e sion o
he 2015/2016 social accoun ing ma ix (SAM) o E hio-
pia (Mengis u e al., 2019).2 The adjus ed SAM consis s
o 71 p oduc ion ac i i ies (Table A1). The ag icul u e
ac i i ies comp ise 30 c op-g owing ac i i ies, 7 li es ock
aising ac i i ies, and 4 o he allied ac i i ies o ag icul-
u e. The e a e 8 indus ial and 6 se ice ac i i ies. The
emaining 16 ac i i ies a e ela ed o ene gy sec o s.
The modi ied SAM comp ises 51 commodi ies o
which 28 a e expo able. Syn he ic (ino ganic) e ilize s
and pe oleum oils a e i ually all impo ed. The e a e
17 p ima y ac o accoun s ep esen ing di e en labo (3
by le el o skill), land ( ain ed and i iga ed), capi al (5 by
p ima y use o he capi al), and li es ock (7 by species).
The e a e ou ax accoun s ep esen ing domes ic sales
axes, impo a i s and du ies, di ec (income) axes,
1 Sensi i i y analysis was pe o med wi h pa ially and en i ely ac i i y-
speci ic c oplands.
2 Addi ional no es ega ding adjus men o he SAM a e gi en in he
Appendix.
and subsidies o selec ed elec ici y p oducing ac i i ies
( eco ded in he SAM as nega i e axes in Table 1). The
SAM comp ises i e accoun s ep esen ing wo house-
holds ( u al and u ban), en e p ises, go e nmen , and
he es o he wo ld. The emainde o he SAM accoun s
ep esen ade and anspo ma gin (o ansac ion
cos s), and disagg ega ed in es men accoun s.
P ima y ac o s accoun o 66% o he p oduc ion
cos s. App oxima ely 90% o he ac o incomes goes o
households. Impo s accoun o abou 14% o he supply
o commodi ies. Consump ion (77%) and sa ings (20%)
a e he main households’ expendi u e i ems whe eas pub-
lic se ices (61%) and sa ings (30%) a e he main go -
e nmen expendi u es. The in lows om he es o he
wo ld include o eign sa ing (which is cu en accoun
de ici o E hiopia) (35%), emi ances (29%) and expo
ea nings (28%). Households’ consump ion (35%), in e -
media e inpu s (23.5%), and in es men demand (18.7%)
a e he main sou ces o demand o domes ically sup-
plied goods and se ices while expo demand accoun s
o app oxima ely 4%. Fac o incomes (88.5%) ollowed
by emi ances (8.9%) a e he main sou ces o house-
holds’ income. Taxes a e he main sou ce o go e nmen
e enue as hey accoun o 74% o he o al go e nmen
income. Abou 65% o ax e enues a e collec ed om
commodi ies (on impo s and on domes ic sales) ol-
lowed by income axes om households and en e p ises
(30%). P oduc ion subsidies (applicable only o he powe
sec o ) accoun o - 4% o he o al ax e enue. E hio-
pian households and o eign sou ces con ibu e o 47%
and 26% o he o al na ional sa ing, wi h he emain-
ing sa ing coming om en e p ises and he go e nmen .
Impo s cons i u e abou 97% o he o al ou lows om
E hiopia o he es o he wo ld.
The 2015/2016 SAM was upda ed using he ecu si e
ea u es o DEMETRA o he yea 2022 using ac ual and
Table 1. Mac o SAM o E hiopia (2015/2016, billion bi ).
Ac i i ies Commodi ies Fac o s Households En e p ises Go e nmen Taxes In es men Res O Wo ld To al
Ac i i ies 2159.70 2159.70
Commodi ies 742.26 456.68 1096.46 148.84 591.58 123.21 3159.04
Fac o s 1425.11 7.83 1432.93
Households 1268.15 11.15 11.32 126.23 1416.84
En e p ises 158.60 5.52 0.28 164.40
Go e nmen 8.19 26.72 181.22 28.35 244.49
Taxes -7.67 118.59 29.21 41.09 181.22
In es men 280.33 84.83 73.06 153.36 591.58
Res O Wo ld 424.07 6.19 2.64 0.61 5.75 439.26
To al 2159.70 3159.04 1432.93 1416.84 164.40 244.49 181.22 591.58 439.26
Sou ce: Au ho s’ elabo a ion.
229
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
o ecas ed g ow h a es o GDP (IMF, 2022) and popula-
ion (UN, 2022b). The o ecas ed eal GDP g ow h a e o
2022 was 3.8% (IMF, 2022). We assume his GDP g ow h
a e, which is lowe han he coun y’s i e-yea a e age o
8% g ow h a e (IMF, 2022; NBE, 2023), accoun ed main-
ly o he impac s o ecen c ises on E hiopia bu li le o
an icipa ed cascading e ec s om he Russia’s in asion o
Uk aine wa impac s on wo ld ma ke s.
The calib a ion p ocess and he adjus ed SAM ep-
esen he con ex s o he coun y and make he model
sui able o add ess he s udy’s esea ch ques ion. The
p oduc ion nes o c ops along wi h he households’
u ili y nes o ene gy commodi ies allow cap u ing he
compe i ion be ween ag icul u e and ene gy o animal
manu e (Mekonnen e al., 2017). The possibili y o sub-
s i u ion be ween di e en uel ypes (ag icul u al esi-
dues, uelwood, pe oleum p oduc s and elec ici y se -
ices) cap u es he “ uel s acking” beha io o E hiopian
households (Yalew, 2022).
2.4. Wo ld p ice change impac scena ios
The e ec s o global commodi y supply, anspo
and logis ics dis up ions, he sanc ions agains Russia,
he expo bans adop ed by some coun ies, and specu-
la i e ma ke beha io s ha ensued Russia’s in asion o
Uk aine ha e emendously a ec ed he p ices o di -
e en wo ld commodi ies in 2022 (Wo ld Bank, 2022).
Al hough p ices o some commodi ies showed a down-
wa d end by he end o 2022 hei le el emained high-
e han in 2021 (Wo ld Bank, 2023).
P ices o many ag i ood and ene gy commodi ies
in E hiopia inc eased in he pas decade (ESS, 2023).
Ye , he impac s o he ecen domes ic c ises (e.g.,
a med con lic s, d ough s) and in e na ional c ises (e.g.,
COVID-19 pandemic and Russia’s in asion o Uk aine)
a e conspicuous (NBE, 2023; EGTE, 2023). The annu-
al a e age p ice indices o pe oleum oil and whea in
he global and E hiopian ma ke s exhibi simila ends
(Figu e 1) subs an ia ing he high in la ion ends in
E hiopia in he pas decade (ESS, 2023) as he local p ice
changes g ew as e compa ed o he wo ld ma ke p ic-
es. Likewise, domes ic e ilize p ices inc ease migh be
la ge han inc eases in wo ld ma ke e ilize p ices
(Abay e al., 2024).
Global p ice changes would con ibu e o (o exac-
e ba e) he domes ic p ice changes which is why i is
impe a i e o examine he implica ions o global com-
modi y ma ke shocks, such as hose ollowed he wa
on Uk aine, o E hiopia.
This s udy conside s he impac s o wo ld impo
p ice changes o h ee commodi ies (whea , e ilize ,
and pe oleum p oduc s) which play subs an ial oles
in he ood and ene gy ma ke s in E hiopia and expe i-
enced mo e han 30% annual a e age eal p ice changes
in 2022 compa ed o 2021 (Table 2). The simula ion sce-
na ios a e designed in a way o: (i) assess he po en ial
lose s om each commodi y p ice change, (ii) iden i y
he dominan impac channel, and (iii) assess he com-
Figu e 1. Compa ison o local and wo ld p ice indices o whea and pe oleum oil. Sou ce: Au ho s’ illus a ion based on da a compiled
om a ious epo s by he Na ional Bank o E hiopia ( e ail gasoline p ice in Addis Ababa, E hiopia), he E hiopian G ain T ade En e p ise
(wholesale whea p ice in E hiopia), and Wo ld Bank (2023) (c ude oil and whea p ices in wo ld ma ke s). T ends o e ilize p ices we e
no p esen ed he e due o lack o publicly a ailable local p ice da a.
230
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
bined e ec s o he inc ease in he impo p ices o he
h ee commodi ies.
Equa ions 1 o 4 cap u e he mechanisms o ans-
mi he impac s o wo ld impo p ice changes o he
E hiopia’s economy in DEMETRA:
(1)
, (2a)
∀c ∈(cm ≠ 0 ∩ cd ≠ 0)
(2b)
(3)
∀c ∈(cm ≠ 0 ∩ cd ≠ 0)
The domes ic p ice o compe i i e impo s o
commodi y c (PMc) is a p oduc o he wo ld p ice o
impo s (PWMc, denomina ed in o eign cu ency,
assumed o be exogenously de e mined and ixed by
he wo ld ma ke s), he exchange a e (ER, domes ic
pe o eign cu ency), and he impo a i a e (TMc)
(Equa ion 1). The equa ion applies o whea , e iliz-
e , and pe oleum uels. Impo ed (QMc) and domes-
ic (QDc) a ie ies a e impe ec subs i u es whose
CES (o A ming on) agg ega ion (QQc, he agg ega e
domes ic supply o commodi y c) is in luenced by he
sha e (δ), he elas ici y o subs i u ion (ρ), and he shi
(α) pa ame e s, o all commodi ies, such as whea ,
which ha e bo h domes ically p oduced (cd) and
impo (cm) a ie ies (Equa ion 2a). Howe e , o some
commodi ies such as e ilize s and pe oleum oil
hei domes ic supplies supply is composed o impo s
only (Equa ion 2b). The cos minimiza ion beha io
o domes ic agen s (i.e., de i ing he i s o de condi-
ions o Equa ion 2a), de e mines he op imal mix o
supplies om domes ic and o eign (impo ) p oduce s
depending on he ela i e p ice o domes ic (PDc) and
impo (PMc) a ie ies o he same commodi y (Equa-
ion 3).
Fo each c opping ac i i y a, we endogenize land
p oduc i i y o conside he yield imp o ing ole o
chemical e ilize applica ion. C op yields (Yl,a) endog-
enously espond o he ela i e changes o he chemical
e ilize applica ion, i.e., he applica ion in he new sce-
na io ( ) ela i e o he applica ion in he base sce-
na io ( ). The esponse ac o (µ ) conside he c op
phenological esponses o chemical e ilize applica ion,
and hus ansla ing in o a change in c op yield pe uni
o cul i a ed land (Equa ion 4).
(4)
The alue o esponse ac o s (was ob ained om a
ele an s udy (Sheahan e al., 2016) and can be in e -
p e ed as a 1% inc ease (dec ease) in e ilize applica-
ion leads o a 0.21% inc ease (dec ease) in c op yield.
Al hough he yield esponses o e ilize use could a y
by c op ype (He el e al., 1996; Rashid e al., 2013), due
o lack o in o ma ion, we applied a uni o m esponse
a e o all c ops, which we acknowledge as a limi a ion.
The h ee commodi ies conside ed a e essen ial
i ems in bo h p oduc ion and inal consump ion sec-
o s. They accoun o one- i h o he o al spending o
me chandise impo s in E hiopia (NBE, 2023). E hiopia
is a ne impo e o whea wi h impo s accoun ing o
a qua e o he whea supply. Acco ding o he SAM,
whea accoun s o 3.3% o o al impo s o goods and
se ices and i is consumed as an in e media e inpu
(26%) and as ood by households (74%). The LES-CES
u ili y unc ions nes employed in he model allows he
possibili y ha households subs i u e whea by o he
ce eals such as e , ba ley, maize, and so ghum depend-
ing on hei ela i e p ice changes.
E hiopia depends on impo ed chemical e ilize s
and pe oleum p oduc s. Fe ilize impo s comp ise
app oxima ely 2% o he o al good and se ices impo s
in he SAM. Fe ilize s a e used as inpu s in c op-g ow-
ing ac i i ies and mo e han 50% o he supply is used
in g owing majo ce eal c ops e.g. whea , maize, e ,
ba ley, and so ghum. In whea and maize, chemical e -
ilize s accoun o up o 6.5% o he o al p oduc ion
cos s. Inc easing chemical e ilize p ices a e expec ed
o educe he use o chemical e ilize s by c op g owing
ac i i ies, and pa ly c opland p oduc i i y (Equa ion 4).
Pe oleum uels accoun o abou 10% o impo s
o goods and se ices in he SAM. They a e consumed
as inpu s in ag icul u e (0.4%), indus y (28.1%), elec-
Table 2. Summa y o he simula ion scena ios.
Scena io Desc ip ion
Impo p ice
shocks
Whea Wo ld whea impo p ice changes + 34%
Fe ilize Wo ld e ilize impo p ice changes + 54%
Pe oleum Wo ld pe oleum oils impo p ice changes + 50%
Combined Combina ion o he abo e impac scena ios
Sou ce: Au ho s’ calcula ions om Wo ld Bank (2023).
No e: The annual a e age eal p ice changes, be ween 2022 and
2021, we e calcula ed as o Feb ua y 2023.
231
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
ici y (2.7%), anspo (51.3%), and he es o se -
ices (10.7%). Households’ demand ep esen s 6.8% o
he demand o pe oleum uels while pe oleum uels
accoun o only 0.4% and 0.5% o u al and u ban
households’ consump ion expendi u e. The bigge p o-
po ion o pe oleum uel p ice change impac on house-
holds’ wel a e is expec ed h ough indi ec e ec s (i.e.,
highe commodi y p ices due o inc eased p oduc ion
cos s in mos o he sec o s as consequence o highe
pe oleum p ices).
3. RESULTS
The subsec ions below p esen he impac s o wo ld
commodi y p ice inc eases on di e en componen s o
E hiopian economy. All esul s a e p esen ed as pe cen -
age changes ela i e o he base scena io, which ep e-
sen s he coun e ac ual E hiopian economy in 2022
wi hou economic epe cussions om Russia’s in asion
o Uk aine. One could conside he impac scena ios as
“wha i ” scena ios in which he in o ma ion on wo ld
impo p ice changes (Table 2) we e p ojec ed and com-
munica ed in ad ance as soon as he wa on Uk aine
began (say as ea ly wa nings). This would ha e helped
E hiopian p oduce s and consume s plan and unde ake
an icipa o y measu es (e.g., ac o alloca ions and adjus -
men s in consump ion demand) in esponse o he an ic-
ipa ed epe cussions om he global ma ke shocks bu
no signi ican in es men and policy changes.
3.1. Impac s on he mac oeconomy
The combined wo ld p ice changes could educe
E hiopia’s eal GDP (by 0.65%), impo s (by 5.5%), p i-
a e consump ion (by 2.7%), and in es men demand (by
1.3%) (Table 3). Likewise, he abso p ion, which meas-
u es he domes ic expendi u e on goods and se ices,
alls by 2%. The e ec s a e d i en by he e ilize and
uel p ice changes al hough whea p ices ha e a ma ked
impac on he ade balance. Inc easing whea impo
p ice dec eases whea impo s (and hence o al impo s)
bu inc eases domes ic whea p oduc ion as well as i s
subs i u e ce eals ( o mee he supply gap) which would
pull ac o s om o he sec o s including hose con ib-
u ing o expo s such as co ee, oilseeds, and manu ac-
u ed oods and be e ages.
As p oduc ion in some ac i i ies con ac (and hence
ac o employmen and income) di ec ax and o al go -
e nmen e enue decline by 4.1% and 0.54% in he com-
bined impac s scena io.
3.2. Impac s on p oduc ion ac i i ies
The domes ic p oduc ion in di e en sec o s espond
di e en ly o he agg ega e and indi idual commod-
i y p ice changes (Table 4). The sec o s wi h he highes
con ac ion o ou pu in he combined impac s scena io
a e se ices, cons uc ion and u ili ies la gely d i en by
he uel p ice changes. P oduc ion in he es o manu-
ac u ing, na u al esou ces-based p ima y sec o s, and
public se ices sligh ly expand (unde e ilize p ice
changes) and in c ops and ood and be e ages (unde
uel p ice changes). Pe oleum p ice change esul s in a
wide ange o ou pu impac s (Figu e 2).
Disagg ega ed esul s show ha he impac s a e
highly sca e ed ac oss sec o s (Figu e 2). Rising whea
p ices expand domes ic whea p oduc ion by 2.5%.
Table 3. The impac s on he mac oeconomy (% changes).
Va iable
Impo p ice change scena ios
Whea Fe ilize Pe oleum Combined
GDP -0.04 -0.32 -0.27 -0.65
P i a e consump ion -0.32 -0.74 -1.64 -2.70
In es men demand 0.13 -0.10 -1.34 -1.34
Abso p ion -0.16 -0.46 -1.39 -2.01
Go e nmen consump ion -0.12 0.22 0.25 0.39
Impo s -0.87 -0.83 -3.81 -5.53
Expo s -1.21 -0.25 2.12 0.55
Sou ce: DEMETRA simula ions.
Table 4. The impac s on domes ic p oduc ion by ac i i y g oups (%
changes).
Ac i i ies
Impo p ice change scena ios
Whea Fe ilize Pe oleum Combined
C ops 0.35 -1.48 1.7 0.52
Li es ock -0.17 -0.07 -0.14 -0.35
P ima y sec o s – g azing,
ishing, o es y, mining -0.19 0.27 -0.41 -0.35
Food and Be e ages -0.87 -0.13 0.42 -0.57
Tex iles, clo hes, lea he ,
and wood p ocessing -0.07 0.31 -0.32 -0.04
Res o manu ac u ing -0.08 0.59 0.09 0.68
U ili ies - elec ici y and
wa e -0.08 -0.06 -2.72 -2.87
Cons uc ion 0.08 -0.04 -1.06 -1.03
Se ices - P i a e -0.15 0.08 -2.59 -2.69
Se ices - Public -0.11 0.16 0.07 0.14
Sou ce: DEMETRA simula ions.
232
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
Unde pe oleum p ice changes, domes ic p oduc ion
expands in ac i i ies wi h subs an ial con ibu ion o
expo s (oilseeds, co ee, ege ables, co on, and ea) and
elec ici y-powe ed anspo se ices. The expansion
o p oduc ion in expo -o ien ed ag icul u al ac i i ies
de i ed om he dep ecia ing exchange a es (due o
highe impo bills) making E hiopian expo s cheape
in he wo ld ma ke s and hus o balancing he inc eas-
ing impo cos s. In con as , ising uel p ices educe
he ou pu s om uel-powe ed anspo se ices, die-
sel-powe ed elec ici y ( om g id and o -g id sys ems),
and o he p i a e (comme cial) se ices which includes
ho els, inancial in e media ies, and o he business se -
ices. Consequen ly, expo s om uel-powe ed ans-
po se ices and, sligh ly, elec ici y u ili ies decline.
P oduc ion in mos c opping ac i i ies con ac s ol-
lowing he ise in wo ld chemical e ilize p ices (Table 4)
wi h negligible size excep o oilseeds, whea , and maize
which declined by 5.4%, 3.8%, and 3.2%. The ma ginal
e ec s on he o he c op g owing ac i i ies a e explained
by he small sha es o ino ganic e ilize inpu s in he
base scena io and om he subs i u ion by manu e (o gan-
ic) o ino ganic e ilize s (Figu e 3). This, howe e , educ-
es manu e a ailable o household ene gy (Table 6).
3.3. Impac s on households’ consump ion
Rising impo p ices a ec households’ consump ion
demand di ec ly (due o inc eased p ices) and indi ec ly
(declining household incomes as ac o incomes all due
o con ac ion o p oduc ion). In he combined impac s
scena io, ac o income dec eases in hi een o he se en-
een ac o s. Fo ins ance, labo ac o incomes decline by
app oxima ely 2% o unskilled o app oxima ely 4% o
semi-skilled and skilled labo ca ego ies whe eas house-
holds’ income om en e p ises decline by abou 10% (o
which 7% is due o he pe oleum p ice inc eases).
The decline in households’ income and he esul -
ing dec ease in demands o commodi ies (due o highe
p ices) esul in declining households’ consump ion by
2% o u al and 3.5% o u ban households (Figu e 4).
The e ec s on he household g oups a y ac oss impo
p ice change scena ios. U ban households a e wo se o
when i comes o whea and uel p ice changes whe eas
u al households a e wo se o unde e ilize p ice
changes. The ad e se e ec s on bo h household g oups
a e mos ly d i en by pe oleum p ice inc eases because
pe oleum p oduc s a e inpu s in almos all ac i i ies
(and hus he ise in uel p ices inc eases in he cos s o
p oduc ion and educes ac o demands and incomes)
and as inal demand p oduc by households (and hus
inc easing p ice educes quan i y demanded).
3.4. Implica ions o ood secu i y
O he ou dimensions o ood secu i y, i.e., a ail-
abili y, accessibili y, u iliza ion, and s abili y (Peng and
Figu e 2. The impac s on domes ic p oduc ion ac i i ies (% chang-
es). Sou ce: DEMETRA simula ions.
Figu e 3. Fe ilize demand unde ino ganic e ilize p ice inc ease
scena io (% changes). Sou ce: DEMETRA simula ions.
Figu e 4. The impac s on households’ consump ion expendi u e (%
changes). Sou ce: DEMETRA simula ions.
239
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
APPENDIX
1. No es on SAM adjus men
This s udy used a modi ied e sion o he 2015/2016
SAM o E hiopia (Mengis u e al., 2019). Impo an
adjus men s we e made pa icula ly pe aining o he
ag icul u e, o es y, elec ici y, and anspo sec o s.
Fo 14 c op g owing ac i i ies, i iga ed a ming was
sepa a ed om ain ed a ming using in o ma ion om
ag icul u al su eys (AgSS, 2016) and o he esea ch
epo s (NCDS, 2017; Tilahun e al., 2011; Hagos e al.,
2009). The li es ock sec o was u he disagg ega ed o
explici ly accoun o 7 ypes o ac i i ies (ca le, sheep,
goa s, camels, equines, poul y, and beekeeping) using
in o ma ion om ag icul u al su ey (AgSS, 2016) and
na ional income accoun s (MoFED, 2012). Animal eed
Table A1. Lis o ac i i ies in he SAM and hei g oup o epo ing esul s.
G oup Ac i i y G oup Ac i i y
C ops G owing ain ed e P ima y sec o s Managed na u al g ass odde
C ops G owing i iga ed e P ima y sec o s Fish
C ops G owing ain ed ba ley P ima y sec o s Fo es y
C ops G owing i iga ed ba ley P ima y sec o s Mining and qua ying
C ops G owing ain ed whea Food & Be e ages P ocessed and manu ac u ed oods
C ops G owing i iga ed whea Food & Be e ages Suga
C ops G owing ain ed maize Food & Be e ages Be e ages and obacco
C ops G owing i iga ed maize Tex iles, clo hes… Tex ile, lea he , clo hes, and wood p ocessing
C ops G owing ain ed so ghum Res o manu ac u ing Res o manu ac u ing
C ops G owing i iga ed so ghum Cons uc ion Cons uc ion
C ops G owing ain ed pulses U ili ies Wa e supply
C ops G owing i iga ed pulses U ili ies O -g id elec ici y, diesel
C ops G owing ain ed oilseeds U ili ies O -g id elec ici y, sola
C ops G owing i iga ed oilseeds U ili ies G id elec ici y, hyd o, Abbay basin
C ops G owing ain ed ege ables U ili ies G id elec ici y, hyd o, Omo basin
C ops G owing i iga ed ege ables U ili ies G id elec ici y, hyd o, Awash basin
C ops G owing ain ed ui s U ili ies G id elec ici y, hyd o, Tekeze basin
C ops G owing i iga ed ui s U ili ies G id elec ici y, hyd o, Wabi-Shebele basin
C ops G owing co ee U ili ies G id elec ici y, hyd o, Res o basins
C ops G owing ense U ili ies G id elec ici y, wind
C ops G owing ain ed suga cane U ili ies G id elec ici y, geo he mal
C ops G owing i iga ed suga cane U ili ies G id elec ici y, sola
C ops G owing ain ed cha U ili ies G id elec ici y, municipal was e
C ops G owing i iga ed cha U ili ies G id elec ici y, diesel
C ops G owing ea U ili ies G id elec ici y, ansmission & dis ibu ion
C ops G owing ain ed co on P i a e Se ices T anspo se ices, elec ici y-based
C ops G owing i iga ed co on P i a e Se ices T anspo se ices, uel-based
C ops G owing ain ed c ops nec P i a e Se ices Res o p i a e comme cial se ices
C ops G owing i iga ed c ops nec. Public Se ices Public adminis a ion
C ops Fo age & bioene gy c ops Public Se ices Educa ion se ices
C ops Cu lowe Public Se ices Heal h se ices
Li es ock Ca le Public Se ices Heal h se ices
Li es ock Sheep
Li es ock Goa s
Li es ock Camel
Li es ock Poul y
Li es ock Beekeeping
Li es ock Equines
Li es ock Domes ic biogas
240
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
sou ces include g ass odde , c op esidues, animal o -
ages, and p oceed animal eed (AgSS, 2016). Fo es
p oduc s we e disagg ega ed in o h ee dis inc p od-
uc s – wood uel, indus ial wood, and non- imbe o es
p oduc s (NTFPs) using p oduc sha es om he na ion-
al income (MoFED, 2012) and o es sec o accoun s
(MoFECC, 2017). Elec ici y p oduc ion is disagg ega -
ed in o o -g id and g id connec ions (MoWIE, 2013),
and hen by echnology using in o ma ion on ins alled
capaci ies in o ma ion (LMSIS, 2017; NBE, 2020; Pappis
e al., 2021; GSE & JICA, 2015; EAPP, 2014) in line wi h
he ecen discussion ega ding he powe sec o in CGE
models (e.g., Chepelie , 2020; Pe e s e al., 2016; Cai &
A o a, 2015; Sue Wing, 2008). Elec ici y ou pu also
accoun s o elec ici y om bagasse as byp oduc om
suga manu ac u ing (ESC, 2019; K uge e al., 2019).
Fu he adjus men was made o accoun o he implici
subsidies o he s a e-owned elec ici y u ili y en e p ise
(T imble e al., 2016) and expo o neighbo ing coun-
ies (NBE, 2020). Elec ici y-based anspo se ices
(o E hio-Djibou i Railway and Addis Ababa U ban
Ligh Rail se ices) a e dis inguished om uel-based
( oad and ai anspo ) se ices. To be e accoun o
he in e linkages be ween ag icul u e and ene gy sec-
o s, he adjus ed SAM also con ains biogas (ac i i y
and commodi y) (Yalew, 2021) and bio uel (mainly as
a byp oduc om suga molasses in suga manu ac u -
ing (ESC, 2019; Tes aye, 2020). Finally, compa ed o he
ini ial SAM (Mengis u e al., 2019), he adjus ed SAM
con ains highly agg ega ed manu ac u ing (as es o
manu ac u ing) and p i a e se ices (as es o comme -
cial se ices). Fo some o he adjus men s, when co -
espondence allows, c oss-checks we e made wi h he
supply and use ables o he 2005/2006 SAM o E hiopia
(IFPRI, 2014).
2. Model calib a ion
Figu e A1. P oduc ion echnology nes s uc u e (au ho ’s elabo a ion).
241
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Table A2. Range o p oduc ion, ade, and consump ion elas ici ies.
Type Nes Desc ip ion Range
P oduc ion L Elas ici ies o subs i u ions among di e en labo ca ego ies (e.g., skilled, semi-skilled, unskilled
wo ke s).
0.30–1.50
KElas ici ies o subs i u ions among di e en capi al ca ego ies (e.g., animal d augh powe ,
ag icul u al machine y, and non-ag icul u al capi al).
0.20–1.50
FERT Elas ici ies o subs i u ions be ween o ganic and ino ganic e ilize s. 0.70
LAND-FERT Elas ici ies o subs i u ion be ween composi e e ilize and land ac o . 0.30
ENG Elas ici ies o subs i u ion be ween ene gy commodi ies o in e media e consump ion (e.g.,
wood uel, bio uel, pe oleum oil, elec ici y).
0.30
VA Elas ici ies o subs i u ions among composi e p ima y ac o s (e.g., labo , land, capi al) 0.30–1.50
VA-ENG Elas ici ies o subs i u ions be ween composi e ene gy and alue-added. 0.30
In e media e Elas ici ies o subs i u ion among di e en in e media e inpu s o he han e ilize s and
pe oleum uels.
0.00
Top le el Elas ici ies o subs i u ion be ween composi e VA-ENG and in e media e inpu s a he op o he
nes .
0.00
T ade Impo s Elas ici ies o subs i u ion be ween impo and domes ic a ie ies o a commodi y 0.80–3.00
Expo s Elas ici ies o ans o ma ion be ween expo s and domes ic a ie ies o a commodi y 0.80-3.00
Consump ion Households Elas ici y o subs i u ion among consump ion goods (only o hose unde CES nes s) 0.75–2.50
Households Income elas ici y o consump ion demand 0.50–1.20
Households F isch pa ame e -1.50
Figu e A2. Households’ u ili y nes (au ho s’ elabo a ion).
242
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Amsalu Woldie Yalew, Vic o Nechi o , Emanuele Fe a i
3. Sensi i i y analysis
Table A3. Sensi i i y o simula ion esul s o A ming on (impo ) subs i u ion elas ici ies.
Le el Va iable
A ming on elas ici ies
[Table A2-30%]
A ming on elas ici ies
[Table A2]
A ming on elas ici ies
[Table A2 +30%]
WHT FRT PTR CMB WHT FRT PTR CMB WHT FRT PTR CMB
Mac oeconomic
Indica o s
GDP -0.04 -0.33 -0.28 -0.66 -0.04 -0.32 -0.27 -0.65 -0.05 -0.32 -0.27 -0.65
P i a e consump ion -0.33 -0.74 -1.63 -2.69 -0.32 -0.74 -1.64 -2.70 -0.31 -0.74 -1.65 -2.70
In es men demand 0.07 -0.13 -1.36 -1.44 0.13 -0.10 -1.34 -1.34 0.18 -0.09 -1.33 -1.26
Abso p ion -0.18 -0.46 -1.39 -2.03 -0.16 -0.46 -1.39 -2.01 -0.14 -0.46 -1.40 -2.00
Go e nmen consump ion -0.06 0.27 0.31 0.56 -0.12 0.22 0.25 0.39 -0.16 0.18 0.21 0.26
Impo s -0.82 -0.81 -3.61 -5.24 -0.87 -0.83 -3.81 -5.53 -0.90 -0.85 -3.98 -5.76
Expo s -0.77 -0.19 2.56 1.49 -1.21 -0.25 2.12 0.55 -1.55 -0.29 1.73 -0.23
Ac i i y
Ou pu s
C ops 0.25 -1.45 1.67 0.45 0.35 -1.48 1.70 0.52 0.43 -1.51 1.73 0.59
Li es ock -0.15 -0.06 -0.17 -0.36 -0.17 -0.07 -0.14 -0.35 -0.18 -0.07 -0.12 -0.34
P ima y sec o s – g azing,
ishing, o es y, mining -0.14 0.27 -0.46 -0.35 -0.19 0.27 -0.41 -0.35 -0.23 0.27 -0.37 -0.34
Food and Be e ages -0.80 -0.16 0.24 -0.74 -0.87 -0.13 0.42 -0.57 -0.93 -0.12 0.58 -0.43
Tex iles, clo hes, lea he , and
wood p ocessing -0.02 0.25 -0.61 -0.36 -0.07 0.31 -0.32 -0.04 -0.12 0.34 -0.09 0.18
Res o manu ac u ing -0.01 0.52 -0.22 0.35 -0.08 0.59 0.09 0.68 -0.15 0.62 0.32 0.88
U ili ies - elec ici y and wa e -0.06 -0.07 -2.72 -2.87 -0.08 -0.06 -2.72 -2.87 -0.09 -0.05 -2.73 -2.88
Cons uc ion 0.04 -0.07 -1.14 -1.18 0.08 -0.04 -1.06 -1.03 0.11 -0.01 -0.99 -0.91
Se ices - P i a e -0.11 0.05 -2.46 -2.57 -0.15 0.08 -2.59 -2.69 -0.18 0.10 -2.71 -2.82
Se ices - Public -0.06 0.20 0.11 0.28 -0.11 0.16 0.07 0.14 -0.14 0.13 0.03 0.04
Consump ion Ru al -0.01 -0.59 -1.25 -1.93 -0.01 -0.62 -1.29 -2.00 0.00 -0.64 -1.31 -2.04
U ban -0.26 -0.38 -2.70 -3.39 -0.35 -0.41 -2.72 -3.52 -0.42 -0.42 -2.74 -3.62
Sou ce: DEMETRA simula ions.
No es: WHT – Whea , FRT – Fe ilize , PTR – Pe oleum, and CMB – Combined p ice scena ios.
243
The implica ions o he Russian in asion o Uk aine o A ican economies: A CGE analysis o E hiopia
Bio-based and Applied Economics 13(3): 225-243, 2024 | e-ISSN 2280-6172 | DOI: 10.36253/bae-15364
Table A4. Sensi i i y o simula ion esul s o assump ions a ec ing c op ac i i ies.
Le el Va iable
C op phenology is less
sensi i e o he le el o
chemical e ilize
Land pa ially mobile ac oss
ac i i ies
Land immobile ac oss
ac i i ies
WHT FRT PTR CMB WHT FRT PTR CMB WHT FRT PTR CMB
Mac oeconomic
Indica o s
GDP -0.05 -0.05 -0.28 -0.39 -0.04 -0.32 -0.29 -0.67 -0.04 -0.32 -0.33 -0.71
P i a e consump ion -0.33 -0.33 -1.64 -2.28 -0.32 -0.75 -1.64 -2.70 -0.31 -0.75 -1.67 -2.72
In es men demand 0.15 -0.12 -1.43 -1.41 0.14 -0.09 -1.44 -1.42 0.18 -0.07 -1.67 -1.58
Abso p ion -0.16 -0.23 -1.41 -1.79 -0.15 -0.46 -1.42 -2.03 -0.14 -0.46 -1.48 -2.08
Go e nmen consump ion -0.13 0.10 0.36 0.34 -0.12 0.20 0.34 0.46 -0.17 0.18 0.67 0.70
Impo s -0.83 -0.53 -4.06 -5.38 -0.83 -0.82 -4.06 -5.72 -0.68 -0.74 -4.77 -6.15
Expo s -1.10 0.56 1.54 1.03 -1.10 -0.20 1.54 0.14 -0.74 0.03 -0.18 -0.91
Ac i i y Ou pu s C ops 0.35 -0.41 1.61 1.54 0.33 -1.40 1.55 0.44 0.40 -1.36 1.19 0.19
Li es ock -0.19 0.01 -0.04 -0.22 -0.12 -0.26 0.21 -0.15 -0.12 -0.25 0.34 -0.03
P ima y sec o s – g azing,
ishing, o es y, mining -0.19 0.13 -0.41 -0.46 -0.12 0.14 -0.38 -0.37 -0.14 0.12 -0.31 -0.33
Food and Be e ages -0.88 -0.08 0.48 -0.48 -0.87 -0.13 0.46 -0.53 -0.92 -0.07 0.61 -0.36
Tex iles, clo hes, lea he , and
wood p ocessing -0.08 0.13 -0.19 -0.14 -0.07 0.29 -0.22 0.03 -0.13 0.26 0.16 0.31
Res o manu ac u ing -0.11 0.26 0.29 0.47 -0.10 0.57 0.26 0.82 -0.20 0.52 0.89 1.27
U ili ies - elec ici y and wa e -0.08 -0.05 -2.72 -2.86 -0.07 -0.06 -2.74 -2.88 -0.09 -0.06 -2.72 -2.88
Cons uc ion 0.09 -0.08 -1.11 -1.10 0.09 -0.03 -1.12 -1.08 0.11 -0.02 -1.24 -1.18
Se ices - P i a e -0.16 0.02 -2.56 -2.71 -0.15 0.07 -2.59 -2.69 -0.19 0.05 -2.46 -2.61
Se ices - Public -0.12 0.07 0.15 0.11 -0.11 0.14 0.14 0.20 -0.15 0.12 0.41 0.40
Consump ion Ru al 0.01 -0.28 -1.44 -1.75 0.02 -0.64 -1.41 -2.12 0.09 -0.60 -1.93 -2.48
U ban -0.36 -0.08 -2.74 -3.19 -0.34 -0.44 -2.72 -3.53 -0.34 -0.42 -2.79 -3.57
Sou ce: DEMETRA simula ions.
No es: WHT – Whea , FRT – Fe ilize , PTR – Pe oleum, and CMB – Combined p ice scena ios. Unde ‘land pa ially mobile’ sensi i -
i y es , c opland o selec ed c ops (i.e., ui s, co ee, ea, suga cane, ense , cha , co on, o age and bioene gy c ops, g ass odde , and cu
lowe ) was assumed o be ac i i y-speci ic and hence canno be ealloca ed in esponse o he an icipa ed impac s.
