Model of Domestic Demand on Coal in Russia

Alexandra M. Zhemkova – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Results of estimation of parameters of the model of domestic demand on coal in Russia based on empirical data demonstrate that demand on power generating coal in the short term is nearly inelastic in price terms, however in the long-term sensitivity to the price change increases. Apart from the global trend towards gradual decrease of coal consumption, this can be due to re-equipment and transition to gas in power generation in the long-term. Demand on metallurgical coal according to the estimates was non-elastic both in short- and long-term perspective, which can be explained that for iron works metallurgical coal thus far is irreplaceable factor of production. Nevertheless, low but not zero elasticity reflects possibilities for export of certain quantity of metallurgical coal in the event of price growth on this product

Key words: coal, model, domestic demand, external demand, demand elasticity, demand function, coal production, hypothesis.