Optimal Pricing of Publicly Supplied Private Goods: A Case Study of NIST Standard211 Reference Materials

摘要

This study provides a framework for determining optimal prices and production211u001eplans for a welfare-maximizing public enterprise that produces multiple goods, 211u001efaces a budget constraint, and is obligated to meet all demand. The report 211u001edescribes the Boiteux model and its extensions. The Ramsey version of the model 211u001eis applied to the pricing problem of the Standard Reference Materials Program 211u001e(SRMP) at the National Institute of Standards and Technology (NIST). The model 211u001ewas applied to a group of 11 SRMs. After estimating their demand and cost 211u001efunctions and combining them with the theoretical principles of the model, 211u001eoptimal prices and production plans were calculated for the group of 11 SRMs for 211u001ethe years 1978 to 1992. The results fulfilled the optimality requirements of the 211u001eRamsey-Boiteux model: Deviations of price from marginal cost were inversely 211u001eproportionate to the good's price elasticities of demand, and the corresponding 211u001eoptimal quantities of SRMs maintained the same proportions as the quantities that 211u001ewould have been demanded at prices equal to marginal cost. In every year of the 211u001estudy period, there would have been a welfare gain if Ramsey prices had been 211u001echarged rather than average-cost prices, and unit sales and revenues would have 211u001ebeen higher than they were under the actual pricing policy of the SRMP in the 211u001eyears from 1978 to 1992.