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Overpricing in Public Procurement of Cars

Dmitry S. Gordeev – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration; Senior Researcher of the Institute of International Economics and Finance, Russian Foreign Trade Academy, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Kaukin – Head of Department for System Analysis of Sectoral Markets of the Russian Presidential Academy of National Economy and Public Administration; Head of Sectoral Markets and Infrastructure Department of the Gaidar Institute, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander O. Tomaev – 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.

Dmitry Yu. Shagarov – Junior 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.

The article develops a method that allows to identify and explain overpricing in public procurement of heterogeneous goods. In the first step, the hedonic model is evaluated and key characteristics affecting car prices are identified. The market prices predicted are then compared with actual contract prices. In the final step, the differences between contract and market prices are explained with the second model.

Key words: public procurement, hedonic model, heterogeneous goods, pricing.