The Influence of Tariff Policy of Natural Monopolies on Producer Prices in the Russian Federation in 2003–2016

Влияние тарифов естественных монополий на цены производителей в России в 2003–2016 годах

Ponomareva, Ekaterina A. (Пономарева, Екатерина)
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Ponomareva, Ekaterina A. (Пономарева, Екатерина): Russian Presidential Academy of National Economy and Public Administration

Ekonomicheskaya Politika / Economic Policy, 2017, vol. 6, 42-71

Abstract: This article examines the impact of state price regulation of natural monopolies on prices of manufactured goods in the main regions of the Russian Federation in 2003–2016. The author has developed a theoretical model of impact of regulated prices for products of natural monopolies on prices of industrial goods. It follows from the theoretical model that the increase in prices of goods and services produced by natural monopolies leads to an increase in production costs of the industrial sectors of the economy and thus to higher prices in the industrial sectors. In order to test the theoretical model, an econometric specification and an appropriate procedure for obtaining estimates were proposed. For the first time in the Russian economic literature, empirical estimates of transmission of shifts in prices for goods and services of natural monopolies to prices of domestic producers of manufactured goods have been received. Average growth in prices for goods and services of natural monopolies by 10% in industrial sectors and regions of Russia has led to an increase in prices of industrial sectors by about 2.0%. The most significant influence of prices for goods and services of natural monopolies on producer prices is observed in the mining industry, chemical production, and the industries of food production, including beverages, tobacco and other non-metallic mineral products. The assessments of the transfer of natural monopolies’ tariffs to prices of manufactured goods are highly relevant in terms of assessing the impact of tariff regulation on the achievement of targets for inflation established by the Bank of Russia.

Keywords: state regulation of natural monopolies; tariff policy; transfer of natural monopoly tariffs to real sector prices; industrial policy; cross subsidization; allocative efficiency. (search for similar items in EconPapers)
JEL-codes: C54 D22 D24 D61 H21 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:rnp:ecopol:ep1762

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