Price Regulation Mechanisms Research Articles

PROSPECTS FOR THE DEVELOPMENT OF THE ELECTRICITY MARKET OF UKRAINE IN THE CONTEXT OF EUROPEAN INTEGRATION

The article is devoted to the problems of the transition of the Ukrainian electricity market to a new market model. Such a transition is due to the intentions of further integration of the energy markets of Ukraine and the EU. The transition to a new model of the electric energy market is accompanied by the appearance of new market participants, as well as new financial and economic relations between them. The purpose of the article is to study the theoretical provisions and systematize the main prospects for the development of the electricity market of Ukraine in the context of European integration. The article analyzes the current state of the electric power industry. It was revealed that more than half of the electricity in 2019-2020 was produced at nuclear power plants. The main consumers of electricity were the residential sector and industry. Systematized main problems of the electricity sector: significant role of the state in the market, lack of transparency in setting tariffs for electricity supply services, existence of debts of market participants and electricity consumers. Attention was drawn to the problem of debts of participants in the electricity market. Prospects for the development of the electric power sector in the context of European integration are highlighted: synchronization of legislation, diversification of energy supplies, implementation of a transparent price regulation mechanism. It is also important for Ukraine to use the EU's experience in creating a stable common energy market. The integration of the energy markets of Ukraine and the EU will contribute to the diversification of Ukraine's energy supply and the introduction of new technologies. This process will take place based on the internal energy market of the EU, which will promote investments, energy security and self-regulation in the market.

Motor fuel retail prices regulation: The influence of the social order characteristics

Regulating retail fuel prices, which are getting particularly volatile, is an urgent issue amid the shock period that the global energy industry is facing today. Price volatility, however, is a factor in coordinating consumers’ and fuel producers’ plans. Economic theory fails to explain why in some countries, during a shock period, governments tend to regulate retail prices, while in others they develop market pricing mechanisms in the fuel market. The article reveals the influence of Douglass North’s social orders on the tendency of governments to establish a price regulation mechanism in the retail fuel market. New institutional economics constitutes the theoretical framework of the study. Among the research methods are case analysis, comparative crosscountry analysis, and statistical analysis. The empirical evidence comes from regulatory legal acts, US and Russian state statistics on fuel prices for 2019–2023, and materials from the GlobalPetrolPrices project. The research results revealed differences in uncertainty assessments by the governments of countries with different social orders: for regulators in open access social orders, industry shock is the reason of finding a new way to adapt to market conditions; for regulators in limited access social orders, it is the risk of destabilization of the social order. Our findings help to outline the institutional rationale behind the implementation of industry-specific policies.

A multi-energy pricing strategy for port integrated energy system based on Bayesian Stackelberg game

This paper proposes a method for multi-energy pricing strategy by constructing Bayesian Stackelberg model, in order to increase the social welfare and extend the optimal results to the case where private information about energy users (EUs) is unknown. Specifically, in Bayesian Stackelberg game model, the port acts as a leader and EUs are competitive followers. Furthermore, the decision processes of port and EUs are coupled together by the probability of consuming electricity and heat. In addition, a price regulation mechanism is designed, which is composed of fictitious play (FP) algorithm and gradient descent algorithm. Consequently, the balance of energy supply and demand can be obtained by loop iteration of these two algorithms. Numerical results have demonstrated that the multi-energy pricing strategy can achieve the balance between supply and demand and improve the social welfare.

Tendencies of the evolution of energy resources prices in the context of the factors influencing renewable energy in the Republic of Moldova

The importance and complexity of the energy field worldwide, including for the Republic of Moldova, the problems and challenges that it faces (including and especially in the Republic of Moldova when it comes to security of supply and pricing), have led us to choose this field as an object of research for this research. The perspective of the price regulation mechanism, of the evolution of prices during the last decade, but also in order to present some aspects of energy security (in conditions of energy crisis in Europe), including a presentation of the measures intended by the authorities of the Republic of Moldova for the development of the sector energy sector of the Republic of Moldova will be an important source for those interested in this topic.

АНАЛИЗ ЦЕНООБРАЗОВАНИЯ НА ЛЕКАРСТВЕННЫЕ ПРЕПАРАТЫ, ПРОИЗВЕДЕННЫЕ В УРАЛЬСКОМ ФЕДЕРАЛЬНОМ ОКРУГЕ

Introduction. Affordability of drugs is a determining factor of transiting to new price regulation mechanisms in the pharmaceutical market, such as reference pricing. Studying the social and economic determinants of wholesale and retail pricing in the pharmaceutical markets of various regions is of additional interest within the context of long- term transition to pharmaceutical insurance. Aim: To identify the signs of price discrimination, exemplified by some administrative-territorial entities of the Ural Federal District. Materials and Methods. A content analysis was performed regarding the aggregated offers available on the nation-wide pharmaceutical marketplace in the context of 10 drug manufacturers located in the Urals Federal District, and an assortment matrix was compiled (n=115). The assortment was analyzed using matrix-based and categorical methods of analysis, while pricing data were collected using the methods of descriptive statistics. Results and Discussion. Using the Sturges formula, interval series of prices were identified, and the variation coefficient was calculated for 115 trade names of drugs. The least variable were the lowest and highest price segments with high and low share of medicines included in the List of Vital and Essential Drugs, respectively. Two synthetic metrics were used to analyze the regional pricing features. Overall price variation was 14.6%, which suggests the presence of discriminatory pricing elements. The riskiest price segment is the range of RUB 100-200 per pack. Conclusions. Based on the findings of the pricing analysis for drugs manufactured in the regions of the Ural Federal District, the discriminatory pricing elements were found in the medium-low price segment.

Research on the impact of exchange rates and interest rates on carbon price changes in the context of sustainable development

Carbon emissions are closely linked to a company’s production activities. The amount of carbon allowances a company holds determines its carbon emissions. Changes in carbon prices interact with firms’ production activities, while changes in exchange rates and interest rates have a direct impact on firms’ production structure, willingness to produce and scale of production. Under the existing literature, most scholars have selected only one market to be used to study its influence on the carbon market. In this paper, the exchange rate market and the interest rate market are selected for the study of the impact of both on the carbon market, using the following empirical analysis methods: DCC-GARCH, TVP-VAR and GA-BP neural network. The empirical results show that interest rates are positively linked to carbon prices, while exchange rates are more negatively linked to carbon prices; exchange rates are less affected by macro factors and external shocks, while interest rates are the opposite and very sensitive to macro shocks; under the training and simulation of the neural network, carbon prices can fluctuate drastically under the combined influence of exchange rate and interest rate movements, which can provide appropriate early warning of future price fluctuations in carbon trading. This shows that adjustments to exchange rates and interest rates need to be treated with caution, and appropriate adjustments should be made to keep carbon prices stable; the government should build a mechanism to transform the green development of enterprises, pushing them to save energy and reduce emissions to achieve low-carbon transformational development; the government should not only introduce policies to support low-carbon enterprises, but also improve the national carbon market laws and regulations and price regulation mechanisms.

Impact of Drug Price Regulation on Patient Access to Medicines: A Systematic Review

This systematic review explored the multifaceted impact of drug price regulation on patient access to essential medicines. Recognizing the complexity of this relationship, the paper investigates the influence of various types of drug price regulation mechanisms, the disparities across different geographical regions and health-care systems, and the differential effects between branded and generic drugs. Our findings illustrate that the effects of drug price regulation are not universally uniform or predictable, but rather, they are highly context dependent. Direct price control measures can, on the one hand, improve accessibility through affordability; yet on the other hand, potentially disrupt drug supply. Indirect price control methods, such as reference pricing and value-based pricing, while designed to spur competition, can be hampered by administrative complexities and potentially stifle pharmaceutical innovation. Despite the pervasive use of drug price regulation, access to essential medicines remains disparate and inequitable, indicating a need for a comprehensive approach that includes health system reforms, improved health literacy, and greater collaboration between stakeholders. Future research should further investigate the enduring disparities in patient access to medicines, the long-term effects of various pricing mechanisms, and their interplay with the evolving pharmaceutical industry and health-care landscapes.

Interrelation between Ecology and Inflation: Theoretical and Institutional Aspect

The article studies the issue of inflation and ecology in theoretical and institutional aspect. We realize the importance of classical factors of inflation, however we would like to highlight such factor as ecology, to be more precise, expenses on providing ecological well-being. In the near future global expenses on ecology can become a considerable reason for price rise. The contribution of ecological well-being to inflation was analyzed from theoretical point of view. The article also explains the mechanism of green inflation development: a growth in nonproduction spending on nature protection at the current stage of output can cause cost rising on average per unit of product. Interrelation between ecology and inflation is shown as a modified Kuznets ecological curve. The graph shows that inflation decreases with rising environmental pollution, but to a certain crucial moment, after which inflation starts growing. The author gives arguments to support the modified Kuznets ecological curve, the major one is the fact that the lower nature-protection costs of the producer that means a high level of pollution, the lower production costs are and thus the lower inflation is and visa verse. The author analyzed results of sociological research that demonstrated that customers are not ready to pay for ecology improvement and price regulation mechanism does not work in this case. In the institutional aspect the fact that price mechanism cannot be used was proved by using the problem of ‘free-rider’ and information asymmetry in regard to ecological well-being as public wealth, which could lead to adverse effects. Certain non-market solutions of the problem of ecology and inflation were proposed.

Comparison of US and EU Prices for Orphan Drugs in the Perspective of the Considered US Orphan Drugs Act Modifications and Discussed Price-Regulation Mechanisms Adjustments in US and European Union.

The 2019 worldwide sales of Orphan Drugs were estimated at $136 billion USD, which constituted 16% of the global pharmaceutical prescription market and is expected to grow by 12% in the next 5 years. A better understanding of Orphan Drug pricing may contribute to on-going discussions on Orphan Drug Act (ODA) corrections in US or modifications of price setting mechanisms in EU. The objective of the study was comparison and analysis of the prices of Orphan Drugs in US and EU. All drugs with Orphan Drug status were compared in the US and EU. For the US prices, the US Department of Veterans Affairs (VA) was sourced. The EU List Prices came from six EU countries: Denmark, France, Germany, Greece, Poland, Spain. We found US prices to be higher than the six selected EU countries. The average Price Ratio was 1.64. The prices across EU countries were more homogeneous, while the number of the reimbursed and therefore available to patient medicines varied and was correlated with GDP per capita r = 0.87. Considered implementation of the External Reference Price system in US may generate significant savings in the US but may result in upward pressure on pricing of Orphan Drugs in EU. Centralization of the Orphan Drugs pricing negotiations in EU may prevent such development and offer a win-win opportunity for all involved parties.

Pharmaceutical regulation, pricing, coverage and policy reform in the United States of America

The United States (US) is the largest economy in the world and the largest pharmaceutical market, accounting for 40% of the global expenditure on pharmaceuticals and almost half of the global pharmaceutical pipeline. This review describes prescription drug regulation, pricing and coverage in the US and provides perspectives for policy reform. With an unregulated market-based pricing system for drugs, the US pays on average 3 to 4 times higher prices for branded prescription drugs than other industrialized countries. Challenges posed by rising drug prices create affordability problems that threaten the American population’s health as well as the sustainability of the US healthcare system. The US stands out as the country with the highest health expenditure per capita, at about 17% of its gross domestic product, and with pharmaceuticals representing over 12% of the total health expenditure. Health coverage is strongly dependent on employmentbased private insurance, with government programs like Medicare and Medicaid providing coverage to older and poorer populations, respectively. Coverage for outpatient prescription drugs is included in most, if not all, private health insurance plans and government programs. Although some drug pricing policy reforms have been proposed in recent years, no major nationwide initiatives have been successful in the US thus far. High drug prices might not only impact the US care system’s efficiency, but can also have a ripple effect to other countries like Brazil that use the US for external reference pricing, even if those countries may have other price regulation mechanisms in place. This is particularly important for new therapies for which no other international prices may be available in the global market besides the one from the US. The growing budgetary pressures from rising drug prices underscore the need for US drug pricing reform and highlight the need for global pricing mechanisms that can help ensure early access to new technologies at fairer prices.

Assessment of the objectivity of growth and effectiveness of the sugar price regulation mechanism

Assessment of the objectivity of growth and effectiveness of the sugar price regulation mechanism

РОЗНИЧНЫЕ ЦЕНЫ НА БЕНЗИН В МОСКВЕ В ПЕРИОД ПАНДЕМИИ COVID-19

The article is devoted to the analysis of retail gasoline prices in Moscow in the period after the start of the spread of coronavirus infection. We analyze the statistical data on changes in wholesale and retail prices for the main brands of gasoline and diesel fuel during the pandemic. Empirical data reveal the effect of the damper price regulation mechanism, which makes it possible to soften the reaction to sharp fluctuations in world oil prices. It is shown that positive and negative price shocks in the world oil market during the pandemic smoothed out at the level of wholesale prices for oil products in Russia, and practically neutralized at the level of retail prices.

Price Regulation Mechanism of Travelers’ Travel Mode Choice in the Driverless Transportation Network

To study the guidance method of driverless travel mode choice from the perspective of traffic supply-demand, we assume that all vehicles are driverless and establish a multimodal travel market model to depict the supply-demand relationship of multimodal driverless transportation network. To regulate the disequilibrium multimodal travel market, an optimal price regulation law is proposed, which aims to minimize the supply-demand deviation and the amplitude of price regulation. Then, the existence, uniqueness, and stability of the optimal price regulation law are confirmed. In the calculation process of a numerical example, the travel prices of driverless car and driverless subway are realized by congestion fee and subway fare, respectively. The results indicate that the optimal price regulation law can reduce the supply-demand deviation of the multimodal travel market and guide travelers to choose a reasonable travel mode to travel in the driverless transportation network.

Sin tax as a public health tool – strengths and weaknesses of this economic solution

The aim of the paper is to present in a synthetic way the sin tax tool, the mechanisms of its functioning, challenges related to the tool and examples of the application of this tax in selected countries. In accordance with Agency for Health Technology Assessment and Tariff System guidelines, a review of literature in the PubMed and Cochrane scientific databases was conducted on the basis of search searches. They searched grey literature and institutional documents of health organizations and legal acts of selected countries that introduced sin tax in the period since 2005. Sin tax is a public health tax that aims to reduce the negative health attitudes of the population through the use of a price regulation mechanism. In order to prepare an effective economic tool, it is important to model it properly. Today, 35 countries around the world have introduced an additional tax on tobacco products, which is wholly or partly used for health care. In 9 countries, targeted taxes have been introduced on a component whose excessive consumption adversely affects health (sugar, salt, fats). Sin tax is a tool that, if properly implemented, can contribute to changing consumer behaviour and thus have a positive impact on the health of the population. It should be remembered that decisions taken at the central level, especially those concerning the introduction of new taxes, should be supported by reliable analyses. Although sin tax is undoubtedly an effective and increasingly widely used tool, it is not free from defects. One of its major drawbacks is its regressive character and potential negative social perception.

The Rationale behind Turkey's High Gasoline Prices

As oil prices increase, companies experience rising costs and falling profits, leaving governments to deal with the increasing interest rate, inflation and unemployment. However, on the consumer side, the key concern of increasing oil prices is their direct impact on the gasoline pump prices. Consequently, oil price rises have always been an important part of the public debate, especially in countries experiencing high prices for gasoline, such as Turkey. After decades of high prices, Turkey has the most expensive gasoline in the world, at 2.64 $s/litre as of Quarter 2 of 2013. The aim of this paper is to reveal which factors are most important in determining gasoline pump prices in Turkey. In addition, a comparison of the periods with different pricing regimes is presented in order to demonstrate the actual effects of policy changes imposed by the government. The results show that, rather than the market variables, retail pump prices are primarily determined by variables that are more of a macroeconomic nature. This conclusion suggests that these market variables are utilized by companies in the market as tools for regulating prices that can be perceived an informal automatic price regulation mechanism.

Carbon Market Regulation Mechanism Research Based on Carbon Accumulation Model with Jump Diffusion

In order to explore carbon market regulation mechanism more effectively, based on carbon accumulation model with jump diffusion, this paper studies the carbon price from two perspectives of quantity instrument and price instrument and quantitatively simulates carbon price regulation mechanisms in the light of actual operation of EU carbon market. The results show that quantity instrument and price instrument both have certain effects on carbon market; according to the comparison of the elasticity change of the expected carbon price, comparative advantages of both instruments rely on the price of carbon finance market. Where the carbon price is excessively high, price instrument is superior to quantity instrument; where carbon price is excessively low, quantity instrument is better than price instrument. Therefore, in the case of carbon market regulation based on expected carbon price, if the carbon price is too high, price instrument should prevail; if the carbon price is excessively low, quantity instrument should prevail.

Price regulation and relative price convergence: Evidence from the retail gasoline market in Canada

This paper explores price regulation and relative price convergence in the Canadian retail gasoline market. We use monthly data (2000–2010) on retail gasoline prices in 60 Canadian cities to investigate (i) whether the retail gasoline market in Canada has experienced a relative price convergence to the mean, which is expected, given the increased economic integration across Canadian provinces; and (ii) whether the introduction of price regulation mechanisms in New Brunswick and Nova Scotia in July 2006 had any impact on the price convergence in these provinces. We use a nonlinear panel unit root test and find solid evidence that Canadian retail gasoline markets are well integrated across locales; however, the share of converging cities reveals a significant decline since July of 2006. The impact of price regulation on price convergence is mixed; our results indicate that since the enactment of the regulation in all New Brunswick cities (9) included in the dataset, gasoline prices converge to the national mean. Volatility of price is also significantly reduced. In contrast, in the wake of price regulation in Nova Scotia, all 6 cities of the province are non-convergent to the mean with increased volatility and overall price level.

Renewables portfolio standard: a means for trade with electricity from renewable energy sources?

This paper discusses the main support mechanisms for enhancing the deployment of renewable energies (RE) implemented in different industrialised countries. The focus is on the electricity sector, where deregulation and liberalisation has led to market opening and introduction of competition in the formerly strongly regulated power market. Under open market conditions, price regulation mechanisms in favour of renewable energies, which were used by many governments to support renewables tend to be considered as being inappropriate, because they lead to distortions in competition and are difficult to abolish once market participants got used to them. Therefore, the idea of creating a demand for RE instead of supporting supply is gradually spreading. This paper concentrates on the Renewables Portfolio Standard (RPS), which is a considerably new instrument that is aimed on the demand side and has only recently entered discussion. It is based on legislatively mandating a percentage share of electricity generated from renewables and proved with certificates. Before this new means is discussed in more detail, a short overview of the existing supply side mechanism is given, to point out the different approach. In addition, examples of some countries already having some experience with the RPS are given, to show the present status of implementation. Derived from these theoretical considerations and practical experiences, the paper discusses possible impacts on market participants. They depend strongly on the outline of the RPS and the organisation of the electricity sector adopted. As a conclusion, the introduction of an RPS cannot alone solve the problem of enhancing the use of RE. However, the advantages are a higher degree of competition among generators or developers of RE technology, more freedom of choice concerning the options for meeting the requirement and perhaps less government expenditures. Also, experiences with national certificate trading within the RPS system could ease the way for international, or at least European, trading systems like the emissions trading as proposed in the Kyoto protocol.