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An application of Ramsey model in transition economy: a Russian case study


  • Babu Nahata

    (University of Louisville)

  • Alexei Izyumov

    (University of Louisville)

  • Vladimir Busygin

    (Russian Academy of Sciences)

  • Anna Mishura

    (Russian Academy of Sciences)


This case study uses the Ramsey model to analyze whether the current electricity prices charged by the natural monopoly Novosibirskenergo in a major industrial region of the Russian Federation are socially optimal. Our estimates of demand elasticities for two major groups of consumers, namely households and industrial users, show that prices are not socially optimal. A decrease in price for industrial users and an increase in price for households would bring the prices closer to socially optimal.

Suggested Citation

  • Babu Nahata & Alexei Izyumov & Vladimir Busygin & Anna Mishura, 2003. "An application of Ramsey model in transition economy: a Russian case study," General Economics and Teaching 0307003, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpgt:0307003
    Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on HP/PostScript/; pages: 29

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    References listed on IDEAS

    1. Cuthbertson, Keith & Dobbs, Ian M, 1996. "A Robust Methodology for Ramsey Pricing with an Application to UK Postal Services," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 229-247, September.
    2. David Kerr, 1999. "The Chinese and Russian Energy Sectors: Comparative Change and Potential Interaction," Post-Communist Economies, Taylor & Francis Journals, vol. 11(3), pages 337-372.
    3. Scott, Frank A, Jr, 1986. "Assessing USA Postal Ratemaking: An Application of Ramsey Prices," Journal of Industrial Economics, Wiley Blackwell, vol. 34(3), pages 279-290, March.
    4. Janusz A. Ordover & Russell W. Pittman & Paul Clyde, 1994. "Competition policy for natural monopolies in a developing market economy 1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(3), pages 317-343, September.
    5. Sergei Guriev & Dmitry Kvassov, 2000. "Barter for price discrimination? A theory and evidence from Russia," Working Papers w0007, Center for Economic and Financial Research (CEFIR).
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    More about this item


    Natural monopolies; Transition economy; Ramsey model.;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • P5 - Economic Systems - - Comparative Economic Systems

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