D - MicroeconomicsReturn

In transition countries, especially in the period of central planning or semi-command regulation, prices of goods and services in the non-tradable sector were regulated, which was one of the main obstacles to normal functioning of the supply-demand market mechanism after the breakdown of the socialist economic system. In the period of economic transition reestablishment of market institutions arises, with price deregulation as one of the fundamental constitutional parts of this process. But in the case of transition economies there exists a recognized doubt in an immediately well functioning market system after deregulation because of inadequate development of the economic system in the past that produced a gap in the development of institutions typical for market economies. The aim of this article is to present the results of the empirical analysis on the market outcomes of price deregulation for chimney sweep services in the Slovenian economy. For this purpose we developed an original model for analysing market outcomes after price deregulation occurs. For the selected case study we recognize large cumulative price growth, that was a consequence of significant supply-side imperfection, since the selection among suppliers is based on the concession system at the municipality level.