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Forecasting of bid prices for years ahead as a necessary tool for evaluating huge investment projects
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33 Экономика. Народное хозяйство. Экономические науки
Date of publication
13.12.2018
Public year
2018
Forecasting of bid prices for years ahead as a necessary tool for evaluating huge investment projects
Annotation
The subject of the article is the presentation of the method of forecasting the demand price for years ahead to estimate the income from the established huge investment project (hereinafter - the project). The peculiarity of the method is the use of macroeconomic indicators as independent variables, which allows you to link the forecast of demand prices to the scenario of economic development as the background on which the project is supposed to be implemented. Estimation of the income from the project in demand prices, and the cost of it in supply prices, avoids the risks associated with overvalued investor expectations. The project, for example, the "Power of Siberia", can cause damage to the country if the costs for it will exceed revenues. For a commercial project, a positive condition for its adoption in conditions of incomplete information is the positivity of the net discounted income. Russia is one of the countries with a non-stationary economy, which adversely affects its growth and efficiency. For decades, for which the project is designed, one should expect an evolution to a stationary state, which is important to take into account in the price forecast. For this purpose, the data for the countries with a stationary economy are used as the basis for the forecast, for which the correlation of prices with macroeconomic indicators is determined. The economy of any country, in which goods are exchanged in the market, eventually evolves to a stationary state. The constructive model of the model is the concept of "Price level", which is the ratio of price to GDP per capita at the same prices, usually current. The price level is a relative value and shows that part of GDP per capita, which is equivalent to the unit price. In countries with a developed market, the value of the price level is remarkable for its stability, which makes it possible to build satisfactory forecasts of demand prices for decades. The reason for the high stability of the price levels is the stationarity of the market economy. The price level is the basis of the model of forecasting the demand price for years ahead. It is calculated on the basis of the dependent variable, which is the logarithm of the price level, decomposed into international and national components. The values of the regression coefficients for these variables are used as weights in calculating the predicted values of the named components. The international component of the logarithm of the demand price level is determined by independent variables pertaining to all countries, including two GDP per capita values (in current prices and the purchasing power parity of currencies) and the price of oil on the world market, which sets the general price level. In addition to these variables, artificial variables that fix the characteristics of individual years are used in the model to describe the international component. For individual goods, specific indicators can be used, for example, for electricity prices - the share of its output at nuclear and hydraulic power plants. Forecasting the values of the international component is done by multiplying the values of indicators taken from the scenario of economic development by the weights obtained by estimating the parameters of the price level model. The national component is described by two groups of independent variables. The first group captures the characteristics of individual countries and is specified before the calculations begin. The second group is formed in the process of calculations and fixes emissions, which are manifested through standardized residuals 100% exceed two standard deviations. The cause of emissions can not always be determined. The national component is determined by the variables for individual countries and the remnants of regression. The forecast of the national component is made by extrapolating of the values revealed in the estimation of model parameters, taking into account the qualitative features incorporated in the scenario of economic development. The forecast of the demand price is defined as the product of the potentiated value of the price level (the sum of the logarithms of the international and national components) per GDP per capita stipulated by the scenario of economic development.
About authors
Vladimir Kossov
professor
National Research University Higher School of Economics
References

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