For citation:
Matveeva, L. G., Chernova, O. A., & Kosolapova, N. A. (2020). Pricing Problems in the Competitive Environment of Water-Economic Complex in the Region. Zhurnal Economicheskoj Teorii [Russian Journal of Economic Theory], 17 (2), 424-432
Abstract:
The scarcity of water resources poses the problem of their distribution and consumption rationality, as well as the related issue of water price formation. In accordance with the established practice of water consumption, in addition to guaranteed norms of water supply, the regional water industry may have “surpluses” of water in a certain time period, the distribution of which forms a competitive segment of the water resources market. The current policy of setting “fair” prices for water does not contribute to the strategic goals of the water industry modernization, nor does it provide a balance of interests for participants in the region’s water sector. Therefore, the purpose of this article is to develop a model toolkit for establishing a “fair” price for water in the competitive segment of the regional water sector, the application of which will ensure the achievement of a interests balance of its entities and at the same time take into account the public interests of maintaining and developing the ecological system of the water basin. The authors consider the sphere of mutual interests and expectations of individual subjects of the water management complex. The construction of a model of “fair” water prices is based on the use of the neoclassical approach, which is based on the concept of “excess demand”, as well as the provisions characteristic of the classical model of general economic equilibrium, modified using linear programming methods. The authors believe that this model can be used as a decision support tool aimed at ensuring a balance of supply and demand for the region’s water resources, as well as their rational distribution and using.
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