Elasticity of Substitution between Domestic and Foreign Goods in Russia’s Consumer Market: the Role of East Asian Imports

Abstract

The article presents estimations of the Armington substitution elasticity between domestic and foreign goods in the Russian consumer market. It is shown that the food market in Russia functioned mainly at the expense of domestic goods, and the market of non-food products – at the expense of imports. The goods that are most sensitive to changes in relative import prices in Russia’s consumer market are identified. It is proved that the effectiveness of the geographical diversification of imports for the Russian economy might be achieved by reducing trade barriers for most durable goods with East Asian countries.