Modelling and factor analysis of pricing determinants in the state-regulated competitive market: The case of Ukrainian flour market

Abstract

The aim of the study is to implement a factor analysis of the determinants of pricing in a state-regulated competitive market using economic and mathematical modelling methods and to develop ways to improve the pricing environment of the market under study. The purpose of the work defines the main objectives: (I) to investigate the features of the competitive model of the Ukrainian flour market; (ii) to analyse the current price conjuncture of the flour market and the dynamics of the main determinants of pricing; (iii) to develop ways of improving the price situation on the flour market on the basis of the factor analysis on the results of economic and mathematical modelling. In order to ensure the reliability and validity of the research results, the following methods were applied: the logical-dialectical method of scientific knowledge in the study of the main theoretical aspects of flour market functioning, the method of logical generalisation and synthesis, comparison, factor analysis, correlation and regression analysis, the graphical method, etc. It has been shown that pricing in a state-regulated competitive market has its own characteristics. For example, in the flour market the price of goods cannot be influenced by producers (sellers) by any methods, therefore determinants of pricing by indirect influence have been taken into account. The five-factor power model of wheat flour price has been constructed. It was substantiated that the price of wheat flour in Ukraine is mostly influenced by consumer price index (0.92 %). The received complex model of wheat flour price may be used also for medium-term forecasting and working out the ways of price formation optimization in the flour market.