In this paper, we conduct an ex-post counterfactual analysis on how the regime change and ethnic violence in Kyrgyz Republic in 2010 affected measures of real income per capita. Namely, we look at real gross domestic product per capita (GDP) and real gross national income per capita (GNI) as the outcome variables. Having two separate measures of income provides a better view of the consequences of the events as GDP reflects the total income of foreigners and locals who were involved in production of goods and services in Kyrgyz Republic, whereas GNI reflects the total income of locals who were involved in production of goods and services at home and abroad. In other words, if foreign owned assets generate a substantial portion of the domestically produced output, GDP will not give an accurate reflection of the material well-being of locals.
The analysis reveals that the tragic events in 2010 came at a high economic cost with estimates ranging from 19% to 37% of aggregate income for the period of 2010 and 2011. The events appear to have affected the income of foreign capital owners less than the income of local population (the GNI based loss of 17% compared to the GDP based loss of 9% in 2010). The year following the events shows even larger losses (20% of GNI and 10% of GDP in 2011), which points to a prolonged or possibly permanent adverse impact on the income trajectory.