AN ANALYSIS OF THE BEHAVIOR OF SOVIET MACHINERY PRICES 1960-73

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• Publication Date: December 1, 1979
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O, National
,WC
n Foreign
Assessment
Center
An Analysis of the Behavior
of Soviet Machinery Prices,
1960-73
ER 79-10631
December 1979
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~~f Nationai
Center
An Analysis of the Behavior
of Soviet Machinery Prices,
1960-73
Research for this report was completed
on 29 October 1979.
Comments and queries on this report are welcome
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ER 79-10631
December 1979
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This study analyzes the movement of machinery
wholesale prices in the Soviet Union during the period
1960-73 in an attempt to shed some light on the extent
of inflation in the machine-building sector. The
approach taken is unique for two reasons. First, it uses
detailed price data rather than information officially
sanctioned by the Soviet Government-such as the
published machinery price indexes or official state-
ments appearing in the open press. Second, it employs
econometric techniques to analyze the connection
between quality improvements and price change in the
machinery items.
Price indexes were constructed for eight types of
machines in four machine-building branches using
both an unweighted average of price relatives and a
hedonic technique, which applies regression analysis to
estimate the relationship between price and technical
characteristics for successive generations of machines.
The paper is organized into five sections. The first
summarizes the controversy over the presence and
extent of inflation in Soviet machinery prices and the
incentives and procedures governing price formation in
the Soviet Union. In the second and third sections two
different methods are used to construct price indexes
for four MBMW branches, and the results of each are
assessed. Then, the implications of the findings for
other branches are considered, and a final section
presents the overall conclusions of the study.
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An Analysis of the Behavior
of Soviet Machinery Prices,
1960-73
Key Judgments Our analysis of the prices of individual machinery products indicates that
substantial price inflation occurred in Soviet machine-building during the
period 196 - . This inflation resulted mainly from an upward revision of
mac finery prices in 1967 but also from pricing new or improved products at
higher levels than warranted by technical improvements.
Although machinery prices did increase during this period, the extent of
inflation was influenced by the shareof new or improved products in
machinery production. Prices, once established, tended to remain constant
between years of major pricea justments i`or those products whose-
characteristics did not ch ge.
According to indexes based on simple price relatives for the same models of
machinery, prices changed little between 1960 and 1966, were revised
upward in 1967, possibly fell in 1971, and declined again in 1973. The sharp
rise in prices in 1967 casts doubt on the official claim that average
machinery prices were unchanged by the 1967 price reform.
An investigation of hidden price inflation via the new-product pricing
channel (simulated innovation) was carried out by constructing hedonic
price indexes. The results show that the practice of pricing "new" products
higher than warranted by the changes in their technical characteristics does
exist in the Soviet Union. While our analysis does not permit us to identify
hidden inflation year-by-year, in some of the samples it was substantial-
averaging 4-5 percent a year from 1960 to 1973.
When the sample for each machine-building branch includes both products
whose characteristics were unchanged over portions of the 1960-73 period
and the "new" products, the price indexes were dominated by the 1967 price
hikes. After 1967 the price adjustments imposed on established products in
1971 and 1973 outweighed the inflationary effects of new-product pricing,
leaving the price level lower in 1973 than in 1967 in most of the machinery
branches in the sample.
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The branches of machine building included in our sample-construction
and road machinery, machine tools, cranes, and trucks-are fairly typical of
machine-building as a whole with respect to the characteristics affecting
inflation. For example, the branches in the sample experienced increases in
total wage and material costs close to the average for all machine building.
A more restricted comparison of the sample branches with other machine-
building branches indicates that changes in unit wage and material costs in
the former were also not atypical. Nonetheless our sample is too small to
serve as the basis for estimating an average rate of inflation for machine
building as Tole
The results of the regression analysis confirm that the formation of
wholesale prices on new models of machinery is carried out in a systematic
way in the Soviet Union. That is, machinery prices appear to be set by price-
setting authorities on the basis of certain key machine characteristics rather
than on a random or ad hoc basis.
Finally, our findings support those of other Western and Soviet studies that
the official Soviet machinery wholesale price indexes are unreliable. Our
research indicates that the official indexes are clearly biased downward,
most likely because of a failure to account for the disguised price inflation
accompanying the introduction of new products.
The presence of inflation in Soviet machine building has a wide-ranging
impact on the different sectors of the Soviet economy. Since inflation is not
uniform across all branches of the machine-building and metalworking
sector (MBMW), it will weigh more heavily on some users than it does on
others.
As industrial enterprises accelerate investment in modernization and
mechanization (for example, by replacing existing machinery and equip-
ment with new and improved machines), the share of investment chewed up
by inflation undoubtedly rises.
Inflation in machine building also raises the cost of consumer durables, both
by increasing the cost of components to manufacturers and by raising prices
on such items as refrigerators, radios, cameras, and the like.
The impact of inflation in machinery prices, however, may be most severe in
the production of military hardware. As a result of Soviet efforts to compete
militarily with the West, defense has become a high technology, innovative
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sector relative to the rest of Soviet industry and thus may be most
susceptible to new-product pricing. On the other hand, it can be countered
that the defense industries are subject to more effective quality control than
are other sectors of industry. Military inspection teams are stationed at
enterprises to ensure that quality standards are met, to monitor costs, and to
oversee production. On balance, however, the more rapid pace of innovation,
product obsolesence, and technological changes in the military sector
probably means that the new-product pricing effect outweighs other
considerations.
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Key Judgments
v
Background
1
Conflicting Claims Regarding Inflation in Machinery Prices
1
Price Formation in the Soviet Economy
5
Study Plan
8
Indexes Based on an Average of Price Relatives
8
Principal Findings
9
Discussion of Findings
10
Principal Findings
14
Discussion of Findings
15
Generalizing From the Findings for Four Sectors
21
Serially Produced Versus Special Orders
21
Product Composition
23
Impact of Inflation
24
B.
Use of Principal Components
C.
Estimating the Change in Wage and Material Costs by Branch of
C-1
D.
Estimating the Change in Production Costs Per Unit of
Output Produced by Branch of Machine Building
D-1
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1.
Official Price Indexes for Machine Building
1
2.
Comparing the Implicit Price Index for Machine Building With the
Official Price Indexes
3
3.
Krasovskiy's Estimated Indexes of Machine Building Prices
for 1970
3
4.
Mitrofanova Machinery and Equipment Wholesale Price Indexes
4
5.
Becker and Desai Machinery Price Indexes
6.
Summary of Data Used for Price-Relative Index Calculations
9
7.
Wholesale Price Indexes, By Branch Based on Price Relatives
10
8.
Regression Results for Construction and Road Machinery
(Pooled Data)
15
9.
Regression Results for Trucks, Machine Tools, and Cranes
(Pooled Data)
16
10.
Wholesale Price Indexes, By Branch, Hedonic Method
17
11.
Regression Results-Partial Sample Variant for Bulldozers
and Excavators
18
12.
Regression Results-Partial Sample Variant for Trucks and Cranes
19
13.
Estimates of the Change in the Total Cost of Inputs, By Branch of
Machine Building, 1970 over 1966
22
14.
Estimates of the Change in Unit Costs, By Branch of
Machine Building, 1972 over, 1966
23
15.
Estimated Wholesale Price Index for the Sample Machine Building
Branches
23
1.
USSR: Wholesale Price Change, By Branch of
Machine Building, 1967
Bibliography
Data Sources
E-1
General Sources
E-7
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An Analysis of the Behavior
of Soviet Machinery Prices,
1960-73
,A prominent Soviet economist, Ia. A. Kronrod, pro-
claimed in 1960 that ". . . inflation in a socialist society
has been eliminated." ' A senior Soviet economist at
Gosphin stated in 1974, "We haven't any process of
inflation." 2 In 1978, Nikolay Glushkov, the Chairman
of the State Committee for Prices, told journalists that,
"There has been no inflation in the USSR since the
early twenties, owing to the economic and monetary
control made possible by socialism...."' The official
view from Moscow, unchanged over the past two
decades, is that price inflation plays no role in the
functioning of the Soviet economy.
There is, however, a growing amount of evidence
refuting the claim of absolute price stability in the
Soviet economy between the infrequent official adjust-
ments in price schedules. This information ranges from
complaints of Soviet citizens over rising prices appear-
ing in the open press to scholarly studies by Western
and Soviet analysts of the Soviet economy. As a result
of this evidence, many Western economists now believe
that the Soviet economic system is subject to a gradual,
but persistent upward movement in the level of
wholesale and retail prices.
Official Price Indexes for
Machine Building'
Enterprise
Wholesale
Prices
Industry
Wholesale
Prices
Enterprise
Wholesale
Prices
Industry
Wholesale
Prices
1960
100
100
1969
89
87
1961
NA'
NA'
1970
89-
85
1962
100
96
1971
82
9~
81
1963
98
96
1972
82
?)'1
79
1964
95
94
1973
77
97
74
1965
92
91
1974
75
74
1966
91
89
1975
75
74
1967
91
89
1976
73
72
1968
91
89
1977
70
70
Source: Narodnoye khozyaystvos SSSR, various issues.
' There are two types of wholesale prices in the Soviet Union. The
enterprise wholesale price (optovaya tsena predpriyatiya) is the
price at which the producing enterprise sells its output. It consists of
the enterprise production costs plus a profit markup. The industry
wholesale price (optovaya tsena promyshlennosti) is the price paid
by the enterprise buyer. Its value depends upon average branch
production costs, a profit markup, the turnover tax (if any), a
markup of the branch sales organization, and transportation charges
if borne by the sales organization.
' NA indicates data are not available.
Conflicting Claims Regarding Inflation in
Machinery Prices
According to official Soviet price indexes, inflation in
machinery prices is not a problem in the USSR. The
published indexes of wholesale prices in the machine-
building and metalworking sectors (table 1) show
prices to have fallen steadily throughout the 1960-77
period. Even in 1967, the year of the major price
reform, wholesale prices in MBMW did not increase
according to the published statistics.
' Dengi v sotsialisticheskom obshchestve, (Moscow:
Gosfinizdat,1960), p. 364.
' The outlook, Wall Street Journal, 18 August 1974.
' The British Broadcasting Corp., Summary of World Broadcasts,
second series SU/ W 1005, 3 November 1978, p. 2.
The validity of the published indexes of Soviet
MBMW prices is questionable.4 Descriptions of the
methodology used by the Central Statistical Adminis-
tration to construct these measures of price change are
at best fragmentary and confusing. For example, the
1962 edition of Narodnoye khozyaystvo, the Soviet
Perhaps the best critical analysis of these indexes is contained in
Abraham S. Becker, "The Price Level of Soviet Machinery in the
1960s," Soviet Studies, XXVI (July 1974). See also Morris
Bornstein, "Soviet Price Statistics," in Soviet Economic Statistics,
ed. by Vladimir G. Treml and John P. Hardt (Durham, N. C.: Duke
University Press, 1972), p. 361. Soviet economists have also openly
criticized the published price indexes. See, for example, la',. Kvasha
and V. Krasovskiy, "Kapital'noe stroitel'stvo i problema
vozmeshcheniya," Voprosy ekonomiky (1964), pp. 71-80.
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statistical handbook that contains the indexes, says
only that since 1961 the indexes are calculated on the
basis of sample data. No additional details are given
until the 1972 edition, which states that the wholesale
price indexes for the separate sectors of industry are
estimated by a chain method-that is, on the basis of
estimates of goods production for each year in current
prices and prices of the previous year.
Other information found in the Soviet literature
provides a brief description of the product sample that
is (or was) used to construct the price indexes.
Specifically, it indicates that the sample was set in
1961, that it consists of 350 machinery products, and
that it is weighted by the values of marketed output
that existed in 1961.5
The sample and the weights evidently have not
1changed over time. D. M. Palterovich reports that
there is no evidence that the sample and weights were
hanged even with the 1967 price reform.6 But the
information provided by the Soviets is just too sketchy
and apparently inconsistent to draw any definite
conclusions about the methodological foundations of
the MBMW wholesale price indexes. Whatever
method is used, it apparently did not change over the
1960-77 period. That is, the existing indexes have
never been revised in any edition of the statistical
handbook during this period nor do any apparent
discontinuities appear in the overall data series. Even
in the 1972 edition when the discussion of the chain
method first appeared, there is no evidence of any
change made to the price indexes.
One other possibility is that the Central Statistical
Administration derives the published price indexes
from value of output data; that is, by dividing an index
of gross value of output (GVO) expressed in current
prices by the index expressed in compara le a pr es.
The relationship between just such an implicit price
index and the officially published price index is shown
in table 2.
' Becker, "The Price Level of Soviet Machinery in the 1960s,"
pp. 364-66.
6 See Abraham S. Becker, "Ruble Price Levels and Dollar-Ruble
Ratios of Soviet Machinery in the 1960s," Rand Corporation, R-
1063-DDRE, January 1973, p. 9.
According to the implicit price index, machine-
building prices fell throughout the 1960-75 period. But
this derived index is almost certainly biased downward
because the Soviet gross value of output indexes are
biased upward. The methods used to price new and
one-of-a-kind products and incorporate them into
production indexes as well as the improper handling of
quality change are the primary causes of this bias.'
Since the GVO index for MBMW is biased upward-
indeed, the bias may be most pronounced in MBMW
because of the rapid product turnover-dividing a
current price production index by an upward-biased
comparable price production index results in an
implicit price index that understates the real change in
prices.
Most important, however, a comparison of the official
and the derived implicit wholesale price indexes reveals
that the two series are almost identical. Hence, not
only must the official MBMW price index be biased
downward but the fact that the movements of the two
indexes are so close calls into question the independ-
ence of the official price indexes and the index of GVO.
While official Soviet price indexes show prices to be
falling, evidence of hidden inflation in MBMW
wholesale prices has been growing.' Complaints of
large increases in machinery prices not justified by
corresponding improvements in machine productivity
have become commonplace in Soviet publications.
Economist V. Krasovskiy cites a typical example in
which a Kiev plant simply renamed a control-measure-
ment instrument and increased its price five times.',
Soviet economists occasionally even try to gauge the
extent of inflation in machinery prices. Becker, in the
article cited above, quotes D. M. Palterovich's estimate
of the rate of inflation in MBMW in the 1960s of
roughly 2 percent per year."
'See, for example, Rush V. Greenslade, "Industrial Production
Statistics in the USSR," in Soviet Economic Statistics, pp. 155-94.
' The term "hidden inflation" has been used by the Western
economists Gertrude Schroeder, David H. Howard, and others to
represent actual upward price movements hidden by the official
price indexes.
' V. P. Krasovskiy, Planirovaniye i analiz narodnokhozyaystvennoy
struktury kapital'nykh vlozheniy (Moscow: Izdatel'stvo
"Ekonomika," 1970), p. 242.
? Becker, "The Price Level of Soviet Machinery in the 1960s,"
p. 373.
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Comparing the Implicit Price Index
for Machine Building With the Official Price Indexes
Index of MBMW GVO in constant prices
Implicit price index for MBMW'
Official price indexes for MBMW'
Industry wholesale prices
Enterprise wholesale prices
34.4
65.4
73.7
83.0
90.4
100.0
106.2
116.0
121.2
133.3
145.9
32.2
64.4
72.4
81.0
90.2
100.0
111.5
124.1
139.1
155.7
173.0`
107
102
102
102
100
100
95
94
87
86
84
118
105
105
105
102
100
95
93
87
87
87
112
102
102
102
100
100
92
92
87
84
84
' Producers' prices. Value for 1960 is from W. T. Lee, The
Estimation of Soviet Defense Expenditures, 1955-75 (New York:
Praeger Publishers, 1977), p. 225. The remaining values are from a
CIA unpublished series by R. J. Abbott. The Lee and Abbott series
are roughly comparable. The major difference being an adjustment
made by Abbott to account for wages paid out of the material
incentive fund.
Krasovskiy has constructed his own price indexes for
various types of machine-building output using data
provided by branch institutes. His indexes-calculated
using the Paasche price index formula (current year
quantity weights)-are shown in table 3. Since
Krasovskiy makes no adjustments for quality change,
his indexes are probably biased upward. Nonetheless, a
simple average of his indexes may provide some clue as
to the actual movement of prices in MBMW between
1965 and 1970-an average annual rate of increase of
3.1 percent.
Another Soviet economist, N. M. Mitrofanova, re-
cently published indexes of wholesale prices of machin-
ery and equipment in the Soviet Union (see table 4). In
a journal article, Mitrofanova presents a wholesale
price index for machinery and equipment, and in a
recent book, price indexes for seven separate categories
of machinery and equipment." As it turns out, her
aggregate index in the journal article seems to be a
simple unweighted average of the seven component
indexes from her book.
" N. M. Mitrofanova, "Tendentsii dvizheniya kontraktnikh tsen v
tbrgovlye stran SEV," Voprosy ekonomiky, no. 8, (August 1978)
pp. 101-6; idem, Tseny v mekhanizmye ekonomicheskovo
sotrudnichestva stranchlenov SEV (Moscow: Izdatel'stvo "Nauka,"
1978), p. 74.
2 Narodnoye hozyaystvo SSSR, 1970, p. 206, and 1975, p. 256.
This index is estimated by the Soviets in enterprise wholesale prices
as of 1 July 1967.
' Index of MBMW gross value of output in current prices divided-4
index of gross value of output in constant prices. }' u
' arodnoye khozyaystvo SSSR, various issues.
Krasovskiy's Estimated Indexes of
Machine Building Prices for 1970
Machine-tool building
125
Power machine building
116
Diesel-locomotive building
144
Railroad-car building
144
Mining machine building
138
Metallurgical machine building
103
Equipment for the coal industry
III
Electrical-engineering industry
108
Equipment for chemical, petroleum, and gas
industry
Road construction machine building and equip-
ment for the building materials industry
122
Automobile industry
115
Tractors and engines
98
Source: V. P. Krasovskiy, Planirovaniye i analiz
narodnokhozyaystvennoy struktury kapital'nykh vlozheniy, p. 234.
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Mitrofanova Machinery and Equipment
Wholesale Price Indexes
Machinery and equipment
[1]
74
76
100
97
106
105
117
119
122
Metalcutting machine tools
[2]
93
58
100
101
109
105
101
106
NA'
Trucks [2]
46
77
100
93
104
105
103
111
NA
Passenger cars [2)
66
83
100
114
115
113
109
108
NA
Excavators [2]
91
99
100
97
110
106
113
114
NA
Bulldozers [2]
89
66
100
69
90
90
90
90
NA
Tractors [2]
51
75
100
104
109
115
123
127
NA
Combines [2]
81
77
100
102
107
100
175
175
NA
Sources:
1. N. M. Mitrofanova, "Tendentsii dvizheniya kontraktnykh tsen v
torgovlye stran SEV," Voprosy ekonomiki, no. 8 (August 1978), p.
103.
2. N. M. Mitrofanova, Tseny v mekhanizmye ekonomicheskovo
sotrudnichestva stran-chlenov SEV (Moscow: Izdatel'stvo "Nauka," 1978), p. 74.
' NA indicates data are not available.
Mitrofanova's machinery and equipment index shows
machinery prices to be rising over the 1961-76 period.
The component indexes also generally increase over
this period with a particularly large increase occurring
between 1966 and 1970. Unfortunately, Mitrofanova
does not include data for 1967 in any of her indexes,
nor does she explain the methodology used to construct
the seven component indexes. Presumably a large
portion of that increase took place in 1967, the year of
the major price reform.
In any event, Mitrofanova's machinery price index
differs markedly from the official indexes. This can
only be suggestive, however, because the official
indexes encompass a wider spectrum of machine
building branches while Mitrofanova's index is con-
structed using only seven machinery items. Moreover,
it is not possible to judge the quality of her indexes
since we know nothing of her methodology.
Two recent estimates of Soviet machinery price
changes have appeared in the Western literature
(table 5). Becker constructed an index of Soviet
machinery prices for the period 1958-70.12 He devel-
oped the index on the basis of official Soviet data
together with other information contained in the Soviet
literature.
Padma Desai has made the most recent attempt to
construct a machinery sector price index." Desai began
by calculating a "true" index of machinery output on
the assumption that it lies between the official Soviet
published index and an index constructed according to
market-economy methodology. To derive this index,
therefore, she calculated the harmonic mean of the
official output index of Soviet machine building and
the corresponding market-economy Greenslade-CIA
index. Finally, a "true" price index for MBMW was
estimated by dividing an index of output in current
(enterprise) prices-estimated from Soviet cost-
distribution tables-by the corresponding "true" out-
put index in constant prices.
" Becker, "The Price Level of Soviet Machinery in the 1960s,"
p. 378. Also, Moorsteen developed price indexes for all Soviet
machinery for the period 1927-58; see Richard Moorsteen, Prices
and Production of Machinery in the Soviet Union, 1928-1958,
(Cambridge, Mass.: Harvard University Press, 1962).
" Padma Desai, "On Reconstructing Price, Output, and Value-
Added Indexes in Postwar Soviet Industry and Its Branches,"
Oxford Bulletin of Economics and Statistics, vol. 40, no. I
(February 1978), pp. 55-77.
4
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Becker and Desai
Machinery Price Indexes
Becker's Index [1]
Desai's Index [2]
(1960
= 100)
(1955
= 100)
1963
106
116
1964
108
113
1965
110
114
1966
113
118
1967
113
122
1968
113
127
1969
114
126
1970
115
129,
1971
NA'
125
1972
NA
125
1973
NA
116
Sources:
1. Abraham S. Becker, "The Price Level of Soviet Machinery in the
1960s," Soviet Studies XXVI (July 1974), p. 378.
2. Padma Desai, "On Reconstructing Price, Output and Value-
Added Indexes in Postwar Soviet Industry and Its Branches,"
Oxford Bulletin QfEconomics and Statistics, vol. 40, no. 1
(February 1978), pp. 68, 69.
' NA indicates data are not available.
These unofficial machinery price indexes present a
diversified picture of price change in the machine-
building sector of Soviet industry.
Comparison of Unofficial
Machinery Price Indexes
Period Covered
Average Annual
Rate of Growth
(Percent)
Mitrofanova
1961-76
3.2
Becker
1459-70
1.9
Desai
1959-73
1.5
Price Formation in the Soviet Economy
The official Soviet policy since the start of the plan era
regarding wholesale prices has been one of absolute
price control. Wholesale prices of established products
are determined under the direct supervision of govern-
ment authorities on a cost-plus-profit basis and remain
unchanged for extended periods of time. General price
reforms and revisions have occurred infrequently since
World War 11-in 1949, 1950, 1952, 1955, and 1967.
Partial price revisions have also occurred recently, for
example, in the case of ferrous products (1 January
1972) and light industry and machine-building
(1 January 1971 and 1 January 1973).
Given the institutional framework governing machin-
ery wholesale prices and the Soviet policy of maintain-
ing price stability, the question of interest is whether
inflation can occur in the Soviet Union and, if so, by
what process. The brief discussion presented here sets
the stage for the analysis that follows.'4
Two events have altered the process of price determi-
nation in the Soviet Union over the past 15 years. The
first was the Economic Reform of 1965. A principle
feature of a command economy is the need for an
incentive system to induce economic participants to
follow the dictates of the planners. The Economic
Reform of 1965 emphasized "individual material
incentive as a means of eliciting proper performance by
all economic agents, from the humblest peasant to the
general director of an `association.' "15 Specifically,
the Reform abolished the basic bonus system existing
at the time and replaced it with a new bonus fund. The
size of the fund, used to finance various supplements to
worker and managerial wages and salaries, was made
to depend upon certain measures of enterprise
performance-sales revenue, the profit rate, and labor
productivity. Profit became an important entity as
both a principal determinant of the size of the bonus
fund and as the source of financing it.
" A great deal has been written on this subject by Western students
of the Soviet economy. For a more detailed discussion of the
question, see, for example, Joseph S. Berliner, The Innovation
Decision in Soviet Industry (Cambridge, Mass.: The MIT Press,
1976); Gregory Grossman, "Price Control, Incentives, and Innova-
tion in the Soviet Economy" in The Socialist Price Mechanisms, ed.
by Alan Abouchar (Durham, N. C.: Duke University Press, 1977),
pp. 129-69; and Morris Bornstein, "The Administration of the Soviet
Price System," Soviet Studies, XXX (October 1978), pp. 466-90.
" Grossman, "Price Control, Incentives, and Innovations in the
Soviet Economy," p. 165.
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The Reform also elevated the role that prices play in
the individual enterprise's decisionmaking process.
Under the new system, higher prices improve both the
seller's success indicators and the amount of profit
available for financing worker bonuses. In fact, Greg-
ory Grossman makes the important point that since the
Reform the Soviet firm is often less sensitive to cost
than to product prices."
The second noteworthy event was the establishment of
the State Price Board (SPB) and an administrative
bureaucracy responsible for the establishment, admin-
istration, revision, and application of prices." The SPB,
which is directly responsible to the USSR Council of
Ministers, has mounted a concerted effort to improve
price discipline, that is, enforcing regulations pertain-
ing to the setting and use of prices.
Wholesale prices had to be revised after the 1965
Economic Reform to give enterprises sufficient profits
to finance bonuses and to pay the 6-percent capital
charge established as part of the Reform. The price
reform of 1966-67, in fact, eliminated most of the
disparities in relative prices and profit rates existing at
that time." Yet, it did very little to revamp the
procedures by which prices were determined. Whole-
sale prices continued to be calculated on a cost-plus-
profit basis under the supervision of central
authorities, and no attempt was made to bring the
fixed prices to equilibrium levels."
A directive promulgated by the State Price Board on
23 June 1969 entitled, "Methodology for Determining
Wholesale Prices for New Producer Goods and Equip-
ment," however, did change methods of calculating
wholesale prices. This directive classifies new products,
into three categories: group I-those items that are
" Ibid., p. 148.
" For a full discussion of the administration of prices, see Bornstein,
"The Administration of the Soviet Price System," pp. 466-90.
" Wholesale prices in light industries were revised in two parts, one
effective 1 October 1966 and the second effective I January 1967.
Heavy industry wholesale prices were revised effective 1 July 1967.
For a discussion of the 1966-67 reform, see Gertrude E. Schroeder,
"The 1966-67 Soviet Industrial Price Reform: A Study in Complica-
tions," Soviet Studies, XX (April 1969), pp. 462-77.
19 The only significant structural change made was in the use of
temporary prices. A 1966 decree limited the use of temporary prices
to machinery, equipment, and instrument industry products intro-
duced for the first time in the USSR. This decree also limited the
duration of temporary prices to nine to 15 months, and a maximum
10-percent profit markup over average cost was imposed.
intended to replace equipment already iQproduction,
group II-items that are similar to existing equipment
but differ in some technical parameters, and group
III-items that are different from any equipment
already in production.20 Procedures were also specified
for calculating prices for the three categories-
analogue pricing for group I, parametric pricing for
group II, and the traditional cost-plus-profit method
for group 111.11
By these measures, Soviet authorities have attempted
to make wholesale prices more rational, to stimulate
technological progress in the overall economy, and to
encourage innovation on the part of industrial enter-
prises. Soviet enterprises have been reluctant generally
to undertake the risk accompanying the introduction of
new products under the cost-plus-profit pricing system.
Since prices of established products remain constant
over long periods of time while at the same time
production costs fall, the production of such
commodities becomes quite profitable. The production
of new products, on the other hand, entail high and
uncertain startup costs and a less favorable profit
picture, especially during the first several years of
production.
The Soviets first attemped to spur innovation by using
temporary prices to boost profits during the early years
of production." Also, a new-products fund was created
to subsidize startup costs. This fund, however, has had
little affect on product development because of restric-
2? Grossman, "Price Control, Incentives, and Innovation in the Soviet
Economy," p. 159.
21 Analogue pricing is the officially sanctioned method of setting
prices on new products that are partial substitutes for older
established products. Under this method, two limiting prices are
calculated-a lower limit price roughly similar to the old cost-plus-
profit price and an upper limit price based on "value in use" or
product productivity. The actual price is supposed to be set
somewhere between these two limits by Soviet authorities on the
basis of a market-clearing rule. That is, the relationship between
demand and supply is to be used to determine the exact price.
Parametric pricing is a method used to set prices of products that are
similar to existing items but differ from them in regard to some
technical parameters. The most often used method of calculating
such prices is to use regression analysis similar to the construction of
the hedonic indexes in this paper. See Berliner, The Innovation
Decision in Soviet Industry, pp. 301-38.
22 Temporary (vremennye) prices, assigned at the inception of
production, are set high enough to cover all startup costs plus a
normal rate of profit. As average costs approach a more normal level
after a period of time and initial startup costs disappear, the price is
supposed to be replaced by a lower permanent price.
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tions on its use and administrative problems. Tempo-
rary prices have had a more significant impact,
although the benefits may have been outweighed by
the abuses it allowed.' As a result, the use of
temporary prices was more restricted under the 1965
Reform. The recently instituted analogue and para-
metric pricing methods promote higher prices and
above-normal profits on new products. These methods
are supposed to take product productivity, customer
demand, and production costs into account in the price
formation process.
Several other methods are being employed to reduce
the rigidity of the old cost-plus-profit pricing system.
For example, product improvement has been made
more lucrative through the use of price surcharges
tacked onto existing price schedules. The introduction
of new products is also being promoted by more
frequent partial price revisions. These revisions make
old products less profitable (thus, promoting new
products) by reducing their prices when production
costs have fallen over time. A more radical measure
along this line is the introduction of "stepwise" pricing
(stupenchatye tseny). Although not yet employed
extensively, it is intended to assure that prices of older
products fall relative to those of new products."
Potential for Hidden Inflation
The incentive for firms to push up prices has been
increased by the Economic Reform of 1965, which
reasserted the role of individual material rewards in
the incentive system. Higher prices improve a seller
enterprise's success indicators, which means greater
bonuses for management and workers. At the same
time, under the Soviet price system, machine users
" Enterprises took advantage of temporary prices to claim products
as new when they were not, in order to get an increase in their price.
This allowed firms to escape the bonds of fixed prices if they thought
their profits were too low.
U "Stepwise" pricing automatically adjusts prices over time in
anticipation of falling production costs. Hence, prices are set high
enough initially to cover startup costs and an above-normal profit.
Prices are automatically lowered during the normal lifetime of the
product enough to allow only normal profits to be earned. Finally,
product obsolescence is anticipated and allowed for by automatically
lowering the price in later years still further so that below-normal
profits are made or even losses incurred. See Berliner, The
Innovation Decision in Soviet Industry, p. 293.
have little incentive to resist higher prices. That is, they
must function in the environment of a seller's market
in which they have to be primarily concerned with
maintaining their sources of supply. In addition, funds
for investment in new equipment are often provided to
them by the state. Thus, cost considerations are only of
secondary importance to the Soviet firm. Although
price discipline has been strengthened by the reorgani-
zation of the price administration system, the potential
for price evasion still remains high. The setting and
monitoring of prices in the Soviet economy is a task of
huge proportions. "Soviet sources declare that there
are at least 10 million separate state prices. In the
industrial wholesale price "reform" (reforma) of
1966-67, "several million" new prices were established
and new price books totaling 38,000 pages were
published." 25
Enterprises are able, through a variety of ways, to
evade price rules-euphemistically termed evasion of
"price discipline" by the Soviets-and to raise prices.
Evasion of the regulations may be overt, such as the
outright disregard of established prices or price-setting
regulations. For example, enterprises may sell at priGes-
that are higher than those published in the official
price catalogues. They either ignore catalogue prices
altogether or misuse*them and the surcharge-discount
schedule that is sometimes attached. Sellers may also
continue to use high, temporary prices beyond the
authorized period. Or enterprises may set prices
themselves rather than follow SPB regulations that
require them to submit new prices to higher authorit
for approval.
Soviet firms may also implicitly evade "price disci-
pline" f
by misapplying the regulations governing pricesf
for new products. The new-product pricing regulations
were written for the purpose of introducing more
rationality into wholesale prices and to encourage
genuine innovation. But the loopholes that remain
allow firms to evade the intent of the rules. Specifi-
cally, enterprises may attempt to engage in what
" Bornstein, "The Administration of the Soviet Price System,"
p. 467.
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Berliner calls, "simulated innovation" and Grossman
calls "pretended innovation." That is, they may
spuriously classify products as genuinely new, when, in
fact, they are not new. For example, a product can be
changed slightly or even just packaged differently. By
merely "changing labels" firms can attempt to have
products classified as "new" with a corresponding
higher price." In addition, in the case of new group I or
group II products, firms can cheat by falsifying data on
production costs and machine productivity when ap-
plying to the State Price Board for a permanent price.
Many Western economists believe that the "new-
Method of Construction
Ideally, a price index should be based on a statistically
representative sample of product prices, properly
weighted and adjusted for change in product quality
over time. Despite the considerable effort invested in
data collection for this study, machinery price indexes
could not be formulated on this basis. Alternative
procedures had to be devised.
In the first approach a simple, unweighted average of
price-relatives was calculated over time. For each of
product pricing" phenomena is so widespread that it the eight types of equipment, links were established for
may be the primary cause of an upward drift in Soviet? )as many models of machines as possible. A link is
wholesale prices. If that is true, then those particular simply observations of prices for a particular machine
industrial sectors with the highest product turnover
rate should have the highest rate of price inflation.
Since the machine-building sector has the most rapidly
changing product mix, it is often cited as being most
susceptible to inflation.
Study Plan
This study tests the proposition that significant hidden
inflation exists in the machine-building sector. To do
this, price indexes are constructed for four categories
of machine-building equipment-construction and
road machinery, machine tools, cranes, and trucks.
Construction and road machinery equipment is further
broken down into five components-bulldozers, scrap-
ers, graders, excavators, and rollers. Thus, in all, eight
industries of the machine-building sector are analyzed.
For each of the eight industries studied, wholesale
prices and technical specifications were collected for as
many machine models as possible over the period 1960
through 1973. The source of this information was a
large volume of Soviet technical-economic textbooks,
magazines, and other monographs. The data are
presented, by sector, in appendix A.
36 Berliner estimates that about one-half of all new products are still
priced on a cost-plus-profit basis (group III.) This suggests that the
potential for "simulated innovation" may be quite high. See
Berliner, The Innovation Decision in Soviet Industry, p. 333.
model in two or more different years. The number of
links established and the link years are shown in
table 6.
For each link, a price-relative was determined by
dividing the most recent year price by the earlier year
price. All price-relatives for the same pair of years
(and the same category of equipment) were then
summed and averaged.
E Pits/Pito
It N
Pit, and Pito are the wholesale price of machine model i
in periods t, and to (i = 1 ... n)
N is the number of machine models for which prices
are reported in both periods.
Finally, a chain index was constructed for each type of
equipment by linking these results over the 1960-73
period. In addition, an overall construction and road
machinery index was obtained by weighting the
individual indexes constructed for scrapers, rollers,
excavators, and bulldozers-using value of output
produced in each sector as weights. (A price index for
graders could not be constructed because of insuffi-
cient data.)
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--" " " measures only changes in the prices of existing
Summary of Data Used for the machine models. In other words, to establish a link, a
Price-Relative Index Calculations machine had to already have been in production in an
earlier year. What the indexes based on price relatives
Number of do not measure is the hidden inflation that may be
Links caused by the introduction of a slightly different or
Construction and road machinery
Scrapers
1961/66
6
1966/67
5
1967/70
9
1970/73
7
Bulldozers
1961/65
5
1965/66
5
1966/67
4
1967/70
11
1970/73
12
Rollers
1961/63
13
1963/65
6
1965/73
9
Graders
NA'
Excavators
1960/61
9
1961/66
8
1966/67
4
1967/69
17
1969/70
14
1970/73
10
Trucks
1960/61
11
1961/66
10
1966/67
10
1967/70
26
1970/73
20
1973/75
17
Cranes
1961/63
12
1963/67
21
1967/68
37
1968/71
34
1971/72
28
1972/73
21
Machine Tools
1960/70
54
,
NA indicates data are not available. ekonomiky, 1973, no. 7, p. 3; and V. G. Treml, Price Indexes for
Soviet 18-Sector Input-Output Tables for 1959-75 (Arlington, Va:
SRI International June 1978, p. 35.)
unchanged version of an old machine model classified
as "new" with a higher price tag.
Principal Findings
The price indexes developed on the basis of an
unweighted average of price-relatives are recorded in
table 7. According to these indexes: 27
? Wholesale prices of established machinery products
tended to remain unchanged in 1960-73 except when
major or partial price revisions were implemented.
? Machinery prices were revised upward in 1967,
possibly downward in 1971, and downward again in
1973.28
? The price increases in 1967 ranged from a low of
about 7 percent to a high of just under 58 percent.
The average increase for the eight sectors was about
25 percent.
? Prices of several types of machinery increased in
1966 as well as in 1967. Most noteworthy is the 15-
percent increase in truck prices in 1966, followed by
a 16-percent increase in 1967.
? The machinery price changes instituted in 1973 were
mostly downward; the revisions ranged from less
than a 1-percent drop to more than an 8-percent
decrease. The only exception was truck prices, which
rose slightly.
27 The index developed for machine tools does not lend itself to
analysis because data were available only for 1960 and 1970.
28 There was a major reform of wholesale prices in the Soviet Union
in 1966-67 subsequent to the Economic Reform of 1965. According
to the Soviets, wholesale prices in light industry were revised in two
parts, one effective 1 October 1966 and the second effective
1 January 1967. Heavy industry wholesale prices were revised
effective I July 1967. Soviet sources also state that machinery prices
were cut by 5 percent as of I Janaury 1971 and again by 8 percent in
1973. See, for example, V. K. Sitnin, "Price-An Important
Economic Lever," Den'gi i kredit, March 1977, pp. 30-9; "The
Economy and Prices" in Pravda
8 February 1977; Voprosy
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Wholesale Price Indexes, By Branch
Based on Price Relatives'
Trucks
Machine
Tools
Cranes
Scrapers
Bulldozers
Rollers
Graders
Excavators
Weighted
Average'
1960
100.0
100.0
100.0
NA'
100.0
100.0
100.0
100.0
100.0
1961
100.0
100.0
100.0
NA
100.0
100.0
103.0
100.0
100.0
1962
100.0
100.0
100.0
NA
100.0
100.0
103.3
100.0
100.0
1963
100.0
100.0
100.9
NA
100.0
100.0
103.3
100.0
91.4
1964
100.0
100.0
100.9
NA
100.0
100.0
103.3
100.0
91.4
1965
100.0
105.1
107.5
NA
100.0
102.0
103.3
100.0
91.4
1966
98.9
108.8
107.5
NA
97.6
102.0
118.9
100.0
91.4
1967
119.5
135.8
169.7 '
NA
104.2
119.8
137.7
130.9'
109.8
1968
119.5
135.8
169.7
NA
104.2
119.8
137.7
130.9
110.6
1969
119.5
135.8
169.7
NA
104.2
119.8
137.7
130.9
110.6
1970
119.1
136.3
169.7
NA
103.3
119.5
137.7
130.9
110.6
1971
119.1
136.3
169.7
NA
103.3
119.5
137.7
NA
106.6
1972
119.1
136.3
169.7
NA
103.3
119.5
137.7
NA
103.9
1973
116.8
135.2
169.7
NA
94.8
114.7
138.8
NA
97.1
' Prices assumed to have remained constant between estimated data
points.
' Sectors are weighted on the basis of the value of output in 1970.
NA indicates data are not available.
Prices are assumed to have increased in 1967; post-1967 sample
data were available only for rollers in 1973 and for machine tools in
1970.
Discussion of Findings
The results of the analysis bolster our confidence in the
data collected and in the methodology used. For
example, our analysis indicates a drop in machinery
prices in 1973 ranging from 1 percent to 8 percent.
Soviet sources confirm that price-setting authorities
cut machinery prices in 1973-by 8 percent (see
footnote 28 above). These same sources report a cut in
machinery prices of 5 percent in 1971.29 Because of
insufficient data, only one of the indexes constructed-
that for cranes-could have revealed a price change in
that year; in fact, the price index for cranes fell by
approximately 4 percent in 1971.
" The Soviets have greatly restricted the distribution of official price
lists (preiskuranty) since the 1967 price reform. As a result,
information on price changes must be collected in bits and pieces
from Soviet journals and newspapers.
Our indexes do differ significantly from the official
indexes of Soviet machinery prices, however. For
example, the published indexes show no change in
1967, while our indexes rise considerably.30 This
disparity could be accounted for by the fact that this
study analyzes the prices of only eight machinery
categories (four MBMW branches), while the official
data encompass all of Soviet MBMW. The machinery
sectors included in the sample represent, at most, about
16 percent of the value of total machinery output, so it
is risky to generalize the experience reported in table 7
to the whole machine-building sector.31
" ? Information compiled from the Soviet literature also indicates the
MBMW prices remained unchanged in 1967. See Barbara S.
Minnich, "Materials on the Soviet Price Reform of July 1967,"
ASTE Bulletin X (Fall 1968), pp. 12-19.
" Share calculated on the basis of data for gross value of output
contained in the reconstructed 1972 Soviet input-output table in
producers' prices. See U.S. Department of Commerce "The Recon-
structed 1972 Soviet Input-Output Tables-Producers' Prices."
(Unpublished report, February 1978).
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Indeed, the direction and magnitude of the 1967 price
change differed substantially among the various
MBMW branches, ranging from a 19-percent decrease
in prices of radio and electronics products to an almost
12-percent increase in prices for tractors and agricul-
tural machinery and equipment (figure 1). It has been
suggested that the largest price increases in 1967 were
imposed on products that were bulky and required a
great deal of metal in their manufacture because a
sharp rise in metal prices occurred in 1967. (The price
of rolled ferrous metals went up by 43 percent, and the
price of ordinary steel increased by 54 percent.) 32 The
share of ferrous metals purchases in total outlays of the
four branches in 1966 was only 8 percent, however,
while the share for all machine-building branches was
9 percent. Thus the findings should be both a fairly
accurate reflection of the behavior of prices of estab-
lished products in the four branches and generally
indicative of revisions in prices of established products
in other machine-building products.
The official industry wholesale price indexes do fall in
1971 (by almost 5 percent) and in 1973 (by more than
6 percent), and our price-relative indexes show a drop
in prices in 1971 and in 1973. The official indexes,
however, also fall in 1969, 1970, and 1972. The data
are too meager to check the official indexes in these
years, but the pattern of yearly price change revealed
in the official indexes is hard to square with price-
setting practices in the Soviet Union. Overall, a
combination of the differences noted in 1967 and the
unusual nature of the Soviet indexes in the late 1960s
and early 1970s increases our skepticism regarding the
official data.
Nonetheless, these findings must be considered in the
light of the weaknesses inherent in the indexes
constructed here-taken individually or as a measure
.of what happened in MBMW as a whole. First of all,
the data do not permit the use of scientific sampling
techniques. Nor is it possible to fudge the representa-
tiveness of the samples by the proportion of output
subsumed in the indexes for each sector; information
on value and mix of output of each sector is not
available. The sample's variability is evident in the
wide disparity in the sample size of the different
branches and the different link years used within
branches. Finally, some of the minor fluctuations in
" Minnich, "Materials on the Soviet Price Reform of July 1967,"
p. 14.
the price indexes probably reflect inaccuracies in the
data rather than price revisions. For example, some of
the instability may be due to erroneous assumptions as
to the effective date of some prices.
The most serious shortcoming of these indexes, how-
ever, is that they do not measure hidden inflation
caused by enterprises which "simulate innovation."
This phenomenon is often cited as the primary source
of hidden inflation in the USSR, so we used a second
method of formulating machinery price indexes in an
attempt to measure this disguised inflation.
Method of Construction
Price increases may be caused by both quality im-
provement and inflationary pressures. The second
approach to developing price indexes used in this study,
the hedonic technique, attempts to identify and sepa-
rate pure price change from increases due to quality
change."
The hedonic technique uses regression analysis to
describe commodities in terms of a set of characteris-
tics or qualities, and then estimates the implicit prices
of each. According to Triplett, "quality is associated
with a ranking of products (or services) according to
grade, desirability, usefulness, or degree of excel-
lence."34 Using this methodology, price change can be
measured over time net of product quality change-
that is, as pure price change.
The hedonic method has been used to test US price
indexes for an upward quality bias.35 The best known
" A fair amount of literature has been published on this subject. See,
for example, Zvi Griliches, ed., Price Indexes and Quality Change
(Cambridge Mass.: Harvard University Press, 1977); and Jack E.
Triplett, The Theory of Hedonic Quality Measurement and Its Use
in Price Indexes, BLS Staff Paper 6, Bureau of Labor Statistics,
U.S. Department of Labor (Washington, D.C., 1971).
H Triplett, The Theory of Hedonic Quality Measurement and Its
Use in Price Indexes, p. 6.
" For a survey of existing studies see Triplett, "Determining the
Effects of Quality Change in the CPI," Monthly Labor Review,
May 1971, pp. 27-32, and "The Measurement of Inflation: A Survey
of Research on the Accuracy of Price Indexes," in Analysis of
Inflation, ed. by Paul H. Earl (Lexington, Mass.: D. C. Heath and
Co.), pp. 19-82. Regression analysis has also been used to make
international price comparisons for complex products that vary in
quality. See Irving B. Karvis et al., A System of International
Comparisons of Gross Product and Purchasing Power, (Baltimore:
Johns Hopkins University, 1975), pp. 104-16.
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Figure 1
USSR: Wholesale Price Change
by Branch of Machine Building, 1967
Electrotechnical M&E
Cable Products
Radio Products
Electronics
Percent
-20 -15 -10 -5 0
Machine Tools)
Forging/Pressing M&E
Casting M&E
Tools and Dies
Light Industry M&E
Food Industry M&E
Printing M&E
Oil Industry M&E
Mining M&E
Metallurgical M&E
Pumps and Compressors
Chemical Industry M&E
Log and Paper M&E
Hoisting/Transport M&E1
Construction M&E1
Construction Material M&E
Railroad Rolling Stock
Shipbuilding
Automobiles)
Tractors and Agricultural M&E
Bearings
Medical Equipment
Other Machinery
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empirical work in this field is a study of the automobile
component of the consumer price index by Zvi
Griliches.36 The development of Soviet hedonic price
indexes in this paper parallels the work of Griliches. It
is an especially attractive way of studying Soviet
inflation because it offers a way of dealing with the
new-product pricing phenomenon.
To repeat, the basic premise of the hedonic method is
that various models of a given type of machine sell at
different prices because they embody different charac-
teristics or qualities. In mathematical language, the
price (Pit) of a machine, model i at time t, can be
expressed as a function of that set of characteristics.
(X.,, X2t, ? ? ?Xnt). For a group of models within a
particular machinery branches, this relationship may
be expressed as follows:
Pit = / (Xlit, X2it . . . Xni!)
where Pit is the price of model i at time t, (and
i=1.... n).
(1)
The first step in the analysis isolates the qualities or
characteristics that influence the product price signifi-
cantly. This is accomplished by regressing price on the
relevant set of characteristics using ordinary least
squares regression techniques and cross-sectional data.
Those quality variables determined by Soviet machin-
ery specialists to be the most important characteristics
of each type of machine-subject to the availability of
data-were used in the cross-sectional regressions. The
final equation for each sector wws selected on the basis
of the statistics generated, as well as some analytical
judgment.
The verification of the exact form of equation (1) is an
empirical question. For purposes of this study, how-
ever, we adopted Griliches' semilogarithmic form,
which relates the natural logarithm of price to the
absolute values of the relevant set of qualities." In
other words, the dependent variable price (Pit),
expressed in natural logarithm form, is specified as a
76 Griliches, "Hedonic Price Indexes for Automobiles: An
Econometric Analysis of Quality Change," in Price Indexes and
Quality Change, pp. 55-87.
" Griliches, "Hedonic Price Indexes for Automobiles: An
Econometric Analysis of Quality Change," p. 58.
linear function of the N independent quality variables.
That is, in time period t:
In Pit = a+fIXul-ffl2X2i! On Xntl + lAi[ (2)38
The additive stochastic term ,u, is assumed to be
normally distributed with mean zero and a finite
variance a,,'.
The second step is to pool the data and estimate a new
equation that separates pure price change from
quality-induced price change. This is accomplished by
respecifying equation (2) to include those quality
variables that were found to have a significant
influence on price and, in addition, binary (dummy)
variables (D, .... DJ for all the years between 1960
and 1975 for which data are available (except for
1960).
InPit = a+/3I Xlit+N2X2it ... OnXnit
+ ... 1dIDl ... IdnDn+IIit (3)
Specifying the model in this way, the regression
coefficients of the quality variables should capture the
change in average machine price due to quality
improvements over the period tested. If the relation-
ship between price and quality found by the cross-
sectional regression analysis does not change over time,
pure price increases-that is, price increases larger
than justified on the basis of quality change-will
cause the function to shift upward. The binary variable
regression coefficients provide a measure of this shift.
Furthermore, because of the way the binary variables
are used and the equation is specified, they can be
interpreted as measuring the approximate percentage
change in the average machine price (if multiplied by
" This specification assumes implicitly the following mathematical
relationship between price and the independent variables:
P = ea . efii X'it e02 X2tt .... eon Xnit
It follows that
LnPi, = a+0, X1tt+02X2,+ ... ? Qn Xnit
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100) between 1960 and the year the variable repre-
sents, holding quality constant.39
Finally, price indexes like those derived by the price-
relative method can be constructed directly from the
coefficients of the binary variables. Indexes were
constructed for the same eight types of machines and
an overall construction and road machinery index was
calculated using value of output as weights. In using
the hedonic method, the number of observations that
could be used from the sample was much larger than in
the price-relative method since each individual obser-
vation of model price and corresponding technical
characteristics could be used. The price-relative
method on the other hand required price links, which
meant that a large number of individual observations
had to be eliminated. Once again, however, data were
not available for every year of the period studied.
Therefore, the hedonic price indexes, like the price-
relative indexes, were assumed to have remained
constant during the years data were missing.
A bothersome problem in most hedonic studies is
multicollinearity-interrelationships among the inde-
pendent variables. The presence of multicollinearity in
the data set used to estimate the coefficients of a single
equation model by ordinary least squares can cause
serious estimation problems. Where multicollinearity
was a problem in this study, an estimating technique
known as principal components regression analysis was
used. (Principal components as an estimating tech-
nique in single equation models is discussed in
appendix B.)
Principal Findings
A large number of regressions were computed, and no
attempt is made here to reproduce all the equations
estimated. Only the regression results used to construct
the wholesale price indexes are shown in tables 8 and 9.
The exact change between two periods can be calculated as follows:
lnP, - In PO = Rd,
PO = Od
,Ie ' '
Od,
-1
The regressions for each machinery category reflect
these technical characteristics that proved to be
statistically significant-determined by the value of
the t statistic shown in parentheses below each
independent variable-in the determination of the
machine prices. The relative influence of the different
characteristics can be judged by their respective
regression coefficients. In the case of scrapers, for
example, bowl capacity, bladewidth, and the machine
control mechanism were the particular machine char-
acteristics that proved to be statistically significant in
explaining scraper prices. Furthermore, the average
price of a scraper increased by 18.8 percent with each
1-cubic-meter increase in bowl capacity, by 52.8
percent with 1-meter increase in bladewidth, and by
38.3 percent when the control mechanism employed
was hydraulic instead of cable.
Regression coefficients are also shown for the binary
variables in those years that data were available. These
coefficients can be used to calculate the average
percentage change in the price of scrapers between
1960 and the year each binary variable represents. In
the case of scrapers, the 1967, 1970, and 1973 binary
variables proved significant. The data indicate that-
abstracting from quality change-the average price of
scrapers increased about 23.6 percent between 1960
and 1967, 28 percent between 1960 and 1970, and 22.4
percent between 1960 and 1973 (see footnote 39
above).
In other words, the binary variables measure pure price
change between 1960 and the year represented by a
particular binary variable in each regression equation.
Price fluctuations between different years can be
measured by comparing coefficients. For example, the
analysis of scrapers shows that prices increased be-
tween 1960 and 1967 by about 24 percent. Between
1967 and 1970 prices went up another 3.5 percent, but
over the 1970-73 period the average price fell by about
4.3 percent.
The results of the regression analysis appear reason-
able, although they varied from sector to sector with
respect to the goodness of fit attained. The portion of
total variation explained by the different models
R Z was generally good-ranging from 77 percent to 97
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Regression Results for Construction
and Road Machinery (Pooled Data)
Scrapers Bull-
dozers
Rollers
Graders
Excava-
tors
Term (a)
(18.21)
(75.13)
(45.79)
(71.57)
(86.22)
Shovel (bowl)
capacity
(SC) '
0.188
(14.01)
0.429
(3.17)
Bladewidth
(BLW) '
0.528
(3.37)
0.106
(2.15)
Horsepower
(HP) '
0.011
(9.27)
0.007
(4.32)
Weight
(WT)I
0.128
(10.57)
0.151
(13.34)
Control
mechanism
(CONDUM)'
0.383
(4.80)
Propulsion method 0.762
(TYP) ' (7.21)
0.980
(8.33)
Type of base -1.069
(TIR) 2 (9.14)
Vibrating option 0.741
(V/B) ' (4.81)
Regression statistics:'
R'
DF
F
0.949 0.919
48 75
148 153
0.809
56
39
0.969
25
192
0.862
102
87
Continuous quality variables.
2 Binary quality variables:
CONDUM-equals I if hydraulically controlled; 0 if controlled by
cable.
TYP-equals I if self-propelled; 0 if pulled.
TIR-equals I if on rubber tires; 0 if otherwise.
V/B-equals I if the roller has the capacity to vibrate; 0 otherwise.
' Binary time variables.
Scrapers Bull-
dozers
Rollers
Graders
Excava-
tors
(0.10)
DUM63 3
0.065
-0.011
(0.50)
(0.11)
DUM65'
0.020
0.053
0.078
-0.106
(0.21)
(0.50)
(0.62)
(1.04)
DUM66'
0.005
(0.05)
DUM67'
0.212
0.213
0.333
(2.15)
(1.89)
(3.39)
DUM69 '
0.349
(3.39)
DUM70'
0.246
0.301
0.301
(2.78)
(3.30)
(3.03)
DUM73'
0.202
0.279 0.266 0.228
0.313
(2.14)
(2.83) (1.95) (2.13)
(2.98)
' The regression statistics shown in the table include the following:
t statistics are shown in parenthesis below each regression coeffi-
cient. They were used to test for the statistical significance of each
independent variable and the intercept term.
R' is the adjusted coefficient of determination. It measures the
proportion of variation of the dependent variable explained by the
independent variables.
DF, the number of degrees of freedom, is equal to the sample size less
the number of variables on the right side of the equation.
The F statistic is used to test for the statistical significance of the R'
value.
97 percent. The number of quality variables found to
affect price was quite small for some sectors, but data
constraints were a problem.
The main difficulties encountered in the regression
analysis were the small sample sizes available in
several of the cross-sectional analyses, some statistical
instability caused by multicollinearity, and some
uncertainty in\interpreting the sign of several of the
quality variables. The physical dimensions of machine
tools, for example, proved to be inversely related to
price. This suggests that the compactness of the
instrument is a consideration in machine tool design in
the USSR.
Discussion of Findings
Based on the regression results shown in tables 8 and 9,
hedonic price indexes were constructed for eight
machine categories (table 10). The indexes have
several interesting implications.
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Regression Results for Trucks,
Machine Tools, and Cranes
(Pooled Data)
Trucks
Machine
Tools
Cranes
Trucks
Machine
Tools
Cranes
Intercept term (a)
6.772
7.537
8.45
DUM63 3
-0.046
(84.03)
(82.30)
(86.50)
(0
48)
Maximum lift capacity
0.18
DUM66 '
0.219
.
at minimum outreach (CLM) '
(11.34)
(2.34)
Maximum lift capacity
0.71
0.399
0.334
at maximum outreach
(5.17)
(3.69)
(3
81)
(CLMA) '
.
Boom size (CBM) '
0.056
DUM68
0.394
(7.82)
(4
61)
Weight (WT)
0.044
0.133
-0.006
DUM70 3
0.252
.
(4.12)
(12.59)
(4.62)
(2.81)
Horsepower (HP) '
0.006
DUM71
0.279
(7.50)
(3.08)
Machine size (DIM)
-0.014
DUM72
0.302
(8.88)
(3.00)
All-wheel drive (DRIVE) 2
0.139
0.341
0.157
(2.56)
(3.23)
(1.38)
Automation (MECH) 2
0.565
Regression
(5.74)
i
i
'
Type of precision (PREC) 2
0.685
stat
st
cs:
R2
0.881
0.802
0.768
(3.51)
DF
144
94
299
DUM61 '
0.112
F
127
81
103
(1.03)
Continuous quality variables.
' Binary quality variables:
DRIVE-equals I if the truck has an all-wheel drive; 0 otherwise.
MECH-equals I if semiautomatic; 0 otherwise.
PREC-equals 1 if a precision instrument; 0 otherwise.
' Binary time variables.
`The regression statistics shown in the table include the following:
t statistics are shown in parenthesis below each regression coeffi-
cient. They were used to test for the statistical significance of each
independent variable and the intercept term.
R2 is the adjusted coefficient of determination. It measures the
proportion of variation of the dependent variable explained by the
independent variables.
DF, the number of degrees of freedom, is equal to the sample size less
the number of variables on the right side of the equation.
The F statistic is used to test for the statistical significance of the R'
value.
First the hedonic indexes indicate that in the branches'
for which we have evidence, machinery price formation
seems to have been carried out in a systematic way. In
other words, within the Soviet price-setting bureauc-
racy individual enterprises or ministries either directly
set prices themselves on the basis of certain key
machine parameters, or they submit prices for ap-
proval to higher authority on the basis of these
parameters. This conclusion follows from the fact that
we were able to replicate reasonably well the Soviet
price-setting process using regression analysis.
Second, like the price-relative indexes, the hedonic
indexes show a substantial increase in machinery
prices in 1967-the year of the major price reform-
for all the machinery items analyzed. Because dummy
variables could not be used for all years between 1960
and 1967, however, the timing has to be inferred.
These pure price increases (not justified by changes in
machine characteristics) ranged from a low of 24
percent to a high of almost 40 percent. The average
increase for the eight categories studied was about 30
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Wholesale Price Indexes, By Branch
Hedonic Method'
Trucks
Machine
Tools
Cranes
Scrapers
Bulldozers
Rollers
Graders
Excavators
Weighted
Average'
1960
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1961
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1962
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1963
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1964
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1965
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1966
100.0
100.0
100.0
100.0
100.0
100.0
124.5
100.0
100.0
1967
123.6
123.7
130.5 '
125.61
139.5
130.9
149.0
128.71
139.7
1968
123.6
123.7
130.5
125.6
139.5
130.9
149.0
128.7
148.3
1969
123.6
123.7
130.5
125.6
141.8
131.9
149.0
128.7
148.3
1970
127.9
135.1
130.5
125.6
135.1
133.0
149.0
128.7
148.3
1971
127.9
135.1
130.5
125.6
135.1
133.0
149.0
NA 4
132.2
1972
127.9
135.1
130.5
125.6
135.1
133.0
149.0
NA
135.3
1973
122.4
132.2
130.5
125.6
136.8
132.2
140.6
NA
135.3
' Indexes are depicted as having remained constant between the
individual years estimated.
' Sectors are weighted on the basis of the value of output in 1970.
' Prices are assumed to have increased in 1967; post-1967 sample
data were available only for rollers and graders in 1973, and for
machine tools in 1970.
' NA indicates data are not available.
percent. The indexes also indicate that Soviet truck
prices were increased in two steps, with the pure price
increase amounting to approximately 25 percent in
1966 and 15 percent in 1967. Although based on only a
sample of the machinery universe, the hedonic indexes,
like the price-relative indexes, do not support the
official Soviet declaration that machinery prices did
not change on average during the 1967 price reform.
Since the hedonic indexes cover established machines
as well as the relationship between price and quality of
new products, a comparison of the hedonic indexes
with the price-relative indexes provides some addi-
tional insights into price behavior during the reform
period. For example, the hedonic indexes exceed the
price-relative indexes for cranes, excavators, trucks,
and scrapers in 1.967. This suggests that in these
sectors, prices for products with changing characteris-
tics were increased more than quality improvements
would justify in terms of the implied price-setting
formulas.
An analysis of these indexes also indicates that price
inflation due to new-product pricing was present
between 1967 and 1973 in almost all the machinery
categories for which the regression analysis was
possible-that is, scrapers, bulldozers, excavators,
trucks, and cranes.40 All the indexes increased in some
year during this period. For example, the bulldozer
hedonic price index rose from 123.7 in 1967 to 135.1 in
'0 The analysis of rollers, graders, and machine tools was constrained
by the fact that data were available for only two years-1960 and
either 1970 or 1973. Hence it was impossible to separate out the
price increases of the 1967 price reform or to develop a profile of pure
price change over the time period studied.
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1970 and then dropped to 132.2 in 11973. Three factors
must be considered in analyzing these data. First, the
timing of the changing price levels must be implied
because data were not available for each individual
year. Hence the rise and fall of the average price level
was probably more gradual. Second, the downward
price revisions by price-setting authorities of estab-
lished machine products in 1971 and 1973 worked
opposite to and apparently outweighed the new-
product pricing trends in those years. Third, the
sample includes items whose characteristics do not
change. Therefore, the measurement of the importance
of hidden inflation in a given sector will be accurate
only to the extent that the sample includes the proper'
mix of established and changing models. The patterns
are similar in the other four indexes, which leads us to
conclude that the new-product pricing phenomenon
does exist and it does contribute to inflation in
machinery prices. Its exact extent is difficult to
quantify although it does not appear to have been
strong enough during this period to outweigh the
downward revisions of established prices.
In an effort to gauge the effect of new-product pricing
more clearly we reran the regressions for the five
machinery categories discussed above. The sample was
modified to include individual model prices only once,
the first year they appeared in the data base. Thus, the
sample was purged of all models whose characteristics
remained unchanged. The results are presented in
tables 11 and 12.
The results of the partial sample regressions were, in
general, good and consistent with the previous find-
ings. That is, the R2 values were acceptable and the
new equations compared very well with the original
equations in terms of the technical characteristic
coefficients. In the case of scrapers, and partially for
cranes, however, the sample size became too small to
obtain meaningful results.
Overall, the regressions verify that new-product
pricing exists and that its effect is larger than apparent
from the original indexes, which account for both new
and established products. The dummy coefficients are
generally larger and, in some instances, substantially
larger than the coefficients obtained when both estab-
lished and new products were included in the sample.
Regression Results-
Partial Sample Variant
for Bulldozers and Excavators '
(Full (Partial (Full (Partial
Sample) Sample) Sample) Sample)
Intercept term (a)
7.062
7.04
8.359
8.359
(75.13)
(57)
(86)
(90)
Shovel capacity
(SC)
0.429
0.531
(3.17)
(3.45)
Bladewidth (BLW)'
0.106
0.147
(2.15)
(2.10)
Horsepower (HP) 2
0.001
0.009
0.007
0.006
(9.27)
(6.19)
(4.32)
(3.42)
DUM61'
0.010
-0.007
(0.10)
(0.07)
DUM65'
0.053
0.164
(0.50)
(1.22)
DUM66'
0.005
0.026
(0.05)
(0.19)
DUM67'
0.213
0.082
0.333
0.404
(1.90)
(0.41)
(3.39)
(4.92)
DUM69'
.349
(3.39)
DUM70'
0.301
0.368
0.301
0.154
(3.30)
(2.97)
(3.03)
(1.13)
DUM73'
0.27
0.393
0.313
0.663
(2.83)
(2.47)
(2.98)
(3.81)
Regression
statistics'
R2
0.919
0.919
0.862
0.913
DF
75
35
87
66
' Sample sizes for scrapers were not large enough to obtain
meaningful results.
Z Continuous quality variable.
Binary time variable.
' The regression statistics shown in the table include the following:
t statistics are shown in parenthesis below each regression coeffi-
cient. They were used to test for the statistical significance of each
independent variable and the intercept term.
R' is the adjusted coefficient of determination. It measures the
proportion of variation of the dependent variable explained by the
independent variables.
DF, the number of degrees of freedom, is equal to the sample size less
the number of variables on the right side of the equation.
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Regression Results-
Partial Sample Variant
for Trucks and Cranes
(Full (Partial
Sample) Sample)
Intercept term (a) 6.792 6.71
(84) (70)
Maximum lift
capacity
at minimum
outreach (CLM)
Maximum lift
capacity
at maximum
outreach (CLMA)'
Boom size (CBM)'
Weight (WT)'
Horsepower (HP)
Machine
size (DIM)
All-wheel
drive (DRIVE)
0.044
0.009
(4.12)
(1.62)
0.006
0.008
(7.50)
(11.97)
0.139
0.142
(2.56)
(1.50)
(Full
Sample)
(Partial
Sample) '
(Full (Partial
Sample) Sample)
(Full
Sample)
(Partial
Sample) '
8.45
8.48
DUM61 '
0.112
0.086
(86.5)
(63)
(1.03)
(0.53)
DUM63 4
-0.046
-0.018
0.18
0.027
(0.48)
(0.16)
DUM66'
0.219
0.176
(11.34)
(9.73)
(2.34)
(1.60)
0.399
0.391
0.334
0.343
0.71
0.013
(3.69)
(2.64)
(3.81)
(3.17)
(5.17)
(1.22)
DUM68 4
0.394
0.457
(4.61)
(4.06)
0.056
0.055
(7.82)
(4.80)
DUM71 '
0.279
(3.08)
-0.006
-0.004
(4.62)
(2.11)
DUM72'
0.302
(3.00)
0.341
0.482
0.157
23
3
34
3
1
38
)
(
.
)
(
.
(
.
)
Regression
i
i
'
stat
st
cs:
k2
.881
0.890
0.768
0.739
DF
144
56
299
123
' Sample sizes for cranes were not large enough to obtain meaningful
results in some years.
' Continuous quality variable.
Binary quality variable.
' Binary time variable.
In summary, our results show that the practice of
pricing "new" products excessively high does exist in
the Soviet Union and does contribute to inflation in
machinery prices. Our analysis does not, however,
enable us to say much about the timing of such price
increases or their exact magnitude, although in some
industries it appears to be substantial-perhaps as
high as 4-5 percent a year if averaged out over the
1961-73 period. More importantly, however, when the
overall level of prices is considered-that is, prices of
both new and established products-the rate of infla-
tion is very slight. In fact, the hedonic indexes
' The regression statistics shown in the table include the following:
t statistics are shown in parenthesis below each regression coeffi-
cient. They were used to test for the statistical significance of each
independent variable and the intercept term.
R' is the adjusted coefficient of determination. It measures the
proportion of variation of the dependent variable explained by the
indepenent variables.
DF, the number of degrees of freedom, is equal to the sample size less
the number of variables on the right side of the equation.
presented in table 10 shoal the level of prices lower in
1973 than in 1967 for most of the machinery industries
analyzed.
Nonetheless, the hedonic indexes can only be sugges-
tive or indicative. First of all they have a fundamental
ambiguity in a Soviet-type setting. The basis for
separating pure price change from price change
associated with quality change of producers' goods
derives theoretically from production and consumer
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theory. Briefly put, the ratio of the price of a new
model of a productive service to the price of an old
model should equal the ratio of their respective
marginal physical products. In an economy where
prices of outputs and inputs determine enterprise
behavior, a new model will not be bought if it is priced
too high relative to an old model. Therefore, when
hedonic indexes are calculated for US automobiles, for
example, the prices represent products that have met a
market test.
In the Soviet context, however, the incentive to
economize on the cost of productive services is much
weaker than it is in the West. Most machinery and
equipment is paid,for by the state rather than the
enterprise, charges on fixed capital are low, and the
enterprise does not have firm prior knowledge of what
share of its profit it will be able to keep or how it will be
able to spend the profits that are left to it. Moreover, if
an enterprise is determined to find a least-cost
production arrangement, it must maneuver within
relatively narrow limits. It usually cannot shop around
for equipment but instead must take what it can get.
Clearly, then, the pricing formulas implicit in the
hedonic indexes constructed from Soviet prices are
different from those that can be estimated from
Western prices. In the West, the coefficient on a given
quality variable represents a decision on how much
producers will be willing to pay for more of that
particular quality. In the Soviet Union, the same
coefficient probably-at best-represents an engineer-
ing calculation on the part of the producing enterprise.
The calculation may be based on comparisons of
producing the particular machine or even on some
estimate of how the productivity of the machine is
changed by variations in the given quality." But the
calculations are in no sense confirmed by a market test.
Moreover, the testimony of Soviet officials, academi-
cians, and machine purchasers as to the nature of new
machinery supports the findings of this study regard-
ing hidden price inflation. Certainly, an impressive
amount of testimony can be collected to the effect that
" Analogue prices theoretically approach market-clearing prices
since, in addition to costs, machine productivity and market demand
are considered in their formation. It is likely, however, that few, if
any, of the prices used here to construct the hedonic indexes are
analogue prices. The analogue pricing methodology still is not used
extensively in the Soviet Union and then only for products that are
partial substitutes for older established goods.
machinery price increases are not justified on the basis
of product quality improvements. As mentioned ear-
lier, consumer complaints of unjustified price increases
are frequent and often vociferous. A typical example is
a report of a recent check by the Soviet State Price
Inspectorate of the GAZ (Gor'kiy Motor Vehicle
Plant) Production Association. It found that in 1977:
The sale of below-standard products at hiked-up
prices alone brought in 850,000 rubles of unlaw-
ful additional profit. Sales at prices which had
not been approved, and which were, of course,
excessively high, brought in 164,000 rubles of
additional profit.42
Soviet economist V. P. Krasovskiy has written exten-
sively on unjustified price increases:
For machine tool building it is typical to have an
increase in prices that is greater than the increase
in capacity of the machine tools and their
productivity. Thus from 1950 through 1962 the
average price of one machine tool increased 2.1
times but the average capacity increased by only
27 percent.43
The increase of approximately 10 percent in the
average passenger capacity of motor buses is
accompanied by a price increase of approxi-
mately 17 percent during the same period.44
Many more examples of consumer complaints about
alleged unjustified price increases could be cited. Yet it
is impossible to determine how typical these com-
plaints are, whether within a given machinery sector or
in MBMW as a whole. Nor is it possible to say whether
the problem has become more or less severe over time.
The economic meaning of the complaints is also often
far from clear. Take, for example, the seemingly
persuasive Krasovskiy citation given above which
reports that in 1951-62 the average price of a machine
tool increased 2.1 times while the average capacity
"S. Davkin, "Bad Side of Price Juggling," Khozyaystvo i pravo,
August 1978.
" V. P. Krasovskiy, Planirovaniye i analiz narodnokhozyaystvennoy
struktury kapital'nykh vlozheniy, p. 235.
" Ibid., p. 237.
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increased by only 27 percent. The precept that the
prices of machine tool services should be proportional
to their marginal productivities assumes that all else is
equal. A new machine tool may work to closer
tolerances, waste less metal, require fewer operators
per machine-hours, need less maintenance, last longer,
or occupy less space. A simple comparison of percent-
age changes in "capacity" and prices cannot reflect all
of the relevant differences. In this connection, Soviet
economists are not much better placed than Western
observers to measure inflation resulting from new-
product pricing. Without a market test, they must
estimate (guess) the "unjustified" component of every
price increase on each product in their sample.
One way of assessing the meaning of the hedonic
indexes is to check the coefficients of the underlying
regression equations against the experience and judg-
ment of experts in industries using the kinds of
machinery included in the indexes. Does a unit change
in a given characteristic warrant a price increase of a
given percentage? Knowledgeable people probably can
give rough answers to such questions, but this analysis
has not been carried out as yet.
Generalizing From the Findings for Four Sectors
Whether the findings for the narrow range of machine-
building products considered in this study are repre-
sentative of machine building as a whole depends on
several considerations: if they are serially produced or
not, their cost, and their composition.
Serially Produced Versus Special Orders
First, machine-building enterprises manufacture in-
dustrial products ranging from serially produced,
homogeneous products at one end of the spectrum to
special order products at the other extreme. All the
products included in this study fall into the serially
produced category, although the portion of total
machinery produced by nonseries manufacturing proc-
esses may be as high as 50-55 percent.45
" Stanley H. Cohn, "National Income Growth Statistics," in Soviet
Economic Statistics, ed. by V. G. Treml and J. P. Hardt (Durham,
N. C.: Duke University Press, 1972), p. 145.
The exclusion from our sample of nonseries production
clearly would bias our results because nonserially
produced machine products are more susceptible to
price inflation in the USSR. Special orders, such as a
power plant or a specialized machine tool or an
automated assembly line, are particularly suspect
because of the relative ease with which pricing
regulations can be evaded. Profit rates are higher,
prices are negotiated directly between buyer and seller,
and a great deal of latitude exists for cheating in the
estimation of production costs. Since most of the
machinery products analyzed in this study would be
categorized as standard equipment, the rate of infla-
tion may be higher in the other machine-building
industries that deal to a large degree in nonserial
output-for example, light industry machinery and
equipment, food industry machinery and equipment
and the like.
Cost Profiles
The sample branches might also be atypical with
respect to their cost structures. Since the various
elements of cost-labor, metals, and the like-be-
haved differently over the period, the inflationary
pressures might, therefore, also be quite different. To
judge the importance of such considerations, we tried
two approaches. First, we looked at the change in total
production costs-wages and materials-between
1966 and 1970, the period of greatest price rise. (The
methodology used for this exercise is explained in
appendix C.)
Comparing the total increase in cost of inputs
(table 13) by branch suggests that the four branches in
our study experienced above-average increases in total
costs between 1966 and 1970. Three of the four
branches fell into the second highest grouping of
branches categorized by the degree of change of input
costs. In the fourth branch-machine tools-costs
increased by more than the average. Thus, prices in the
four branches would be expected to go up at least as
fast as prices in machine building generally-but not
much faster.
While the analysis of total costs is crude at best, it has
the advantage of comparing cost changes for all
machinery branches. Its major drawback is that it does
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Estimates of the Change in the Total Cost of
Inputs, By Branch of Machine Building,
1970 over 1966 '
Group I
not take changes in later productivity into account .16
We therefore tried to determine the change in prodtlc-
tion costs-labor and material-per unit of real
output. (The period analyzed was 1966-72 and the
methodology, data sources, and calculations are de-
scribed in appendix D.) Because of the dubious
Percent reliability of reported or estimated real output in some
(10 to 14 percent)
Cable products
10.5
Printing M&E
12.9
Mining and Metallurgy M&E
13.4
Light industry M&E
13.8
Group 2
(15 to 19 percent)
Electrotechnical M&E
15.0
Forging and pressing M&E
15.7
Casting M&E
16.4
Precision instruments
15.6
Pumps and chemical equipment
16.3
Food industry M&E
17.4
Construction material M&E
18.4
Machine tools'
18.8
Logging and paper M&E
19.8
Group 3
(20 to 24 percent)
Automobiles'
20.0
Transportation M&E
20.4
Construction M&E'
20.1
Hoisting and transporting M&E'
20.2
Radio and other MB
20.7
Energy and power M&E
21.0
Bearings
21.7
Group 4
(25 to 29 percent)
Tools and dies
25.8
Mean
18
sectors, only seven machinery branches could be
analyzed, of which three are included in our sample.
The results of this exercise are shown in table 14.
Total costs per unit of real output increased by an
estimated average of 17 percent in the seven branches
between 1966 and 1972. The three branches of
MBMW analyzed in our sample experienced increases
of roughly 10 percent on average. Of these three, two
experienced increases below and one above the average
of all seven. Thus, whereas the comparison of changes
in total costs (table 13) would have led one to expect
rates of inflation slightly above average in the sample
sectors, a comparison of changes in unit costs suggests
the opposite. The analysis of unit costs is not the last
word, however. Only a small number of machinery
industries were analyzed and rising unit costs in a
particular industry does not guarantee price increases
in that industry. Rather profits may be squeezed or-
as in the coal industry-subsidies may be introduced or
"Unit total cost (UTC) of real output produced equals the sum
of unit material costs (UMC) and unit labor costs (ULC), abstract-
ing from depreciation.
Unit material costs equal the sum of nominal material purchases
(M) divided by real output produced (Y).
UMC = M/Y
Unit labor costs equal nominal wage rates (W) times man-years
divided by real output produced.
W X man-years
Y
Calculations are based on data presented in table C-1, appendix C.
' This branch was analyzed in this paper.
Labor Productivity (LP) equals real output divided by man-years.
LP = Y/ man-years
It follows that
ULC = W/LP
UTC = M/Y+W/LP
Hence, an analysis of the change in unit costs implicitly accounts
for changes in labor productivity.
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Table 14
Estimates of the Change in Unit Costs,
By Branch of Machine Building,, 1972 over 1966'
Unit Labor Unit
Total Unit
Costs
Material
Costs
Costs
Energy and power M&E
20.9
31.8
28.8.
Electrotechnical M&E
32.4
33.0
32.8
Mining and metallurgy
M&E
-5.9
56.6
31.8
Hoisting and
transporting M&E'
-2.9
14.3
11.0
Construction M&E'
6.4
30.1
25.6
Transportation M&E
-2.2
-8.2
-7.1
Automobiles'
-16.8
-3.5
-6.2
Mean
4.6
22.0
16.7
Calculations are based on data presented in table D-1, appendix D.
This branch was analyzed in this paper.
increased. Nevertheless, a comparison of change in
unit costs may reveal those industries where pressures
to escape the yoke of fixed prices by engaging in new-
product pricing are the greatest. On balance, we judge
that the machinery branches analyzed in this study are
fairly typical of the rest of the machine-building
branches with regard to cost pressures.
Product Composition
The representativeness of our sample with regard to
product composition (that is, new versus established
products) is far less clear. We simply cannot judge
from the available evidence which branches of machin-
ery have the largest share of new or improved products
in their output. Since this is a key issue in assessing the
extent of inflation, any aggregate index of price
inflation in MBMW based on our results can only be
considered suggestive. Such an index, presented in
table 15 and based on price behavior in the sample
branches, indicates a rate of inflation of about
2.6 percent per year if averaged over the whole period.
Most of the rise probably occurred, however, in 1966
and 1967, with the overall price level falling in 1971
and 1973.
Estimated Wholesale Price Index
for the Sample Machine Building Branches
1960
100
1961
NA'
1962
1963
1964
1965
1966
117
1967
145
1968
146
1969
146
1970
146
1971
144
1972
145
1973
139
Source: Derived by weighting the hedonic indexes for construction
and road machinery, trucks, and cranes shown in table 10. The
weights used were the gross value of output of the construction
M&E, automobiles, and hoisting and transporting M&E sectors
shown in Barry C. Kostinsky, The Reconstructed 1966 Soviet Input-
Output Table: Revised Purchasers' and Producers' Price Tables,
Foreign Economic Report no. 13, U.S. Department of Commerce,
(September 1976).
' NA indicates data are not available.
Extent of Price Inflation
Price inflation did occur in the machine-building
sector during the period 1960-73, according to our
analysis. Furthermore, this inflation was the result of
the setting of prices for new or improved products at
higher levels than warranted by the improvement in
the technical characteristics of the new products, as
well as of the upward revision of machinery prices in
1967. Other studies by Western and Soviet scholars
also report an inflationary trend in machinery whole-
sale prices in the 1960s and early 1970s.
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The extent of inflation was found to depend partly on
the share of "new x-imp in total
machiinne__ry_produc.tion. Our analysis indicates that
prices, once established, remained constant for those
products whose parameters did not change over the
eriod studied, except when major price reforms or
[revisions were carried out. For products in our sample
that did change, howe r, the average 'rate of price
inflation was found to be about 4 percent per year
during 1961-73. Among the several industries- .
machinery examined, this rate varied from a low of 3
percent per year for bulldozers to a high of over 5
percent per year for excavators. When the prices of
both new and established products were considered
together for the machinery industries included in this
study, howe a overall level of prices changed little
after 1967, reflec mg a high ro ortion of estab-
l' a pro ucts in our product sample. We judge that
over brief periods the share of long-established pro-
ducts in the machinery sector as a whole still exceeds
that of "new or improved" products, thus attenuating
the impact of inflation on the overall price level of
machinery.
It should be pointed out that none of the methods used
in this paper to construct machinery price indexes can
uncover hidden inflation due to outright cheating on
the part of Soviet enterprises. The analysis rests on list
or published prices rather than transaction prices. We
simply cannot assess the degree to which Soviet
enterprises explicitly violate price regulations by ignor-
ing or misapplying catalogue prices. Chances are
equally remote that we can tell whether the extent of
such violations has varied over time, leading to a bias in
price indexes compiled on the basis of list prices.
The officially published index of wholesale prices in
Soviet machine building remains somewhat of a
mystery. The profile of price change presented by the
official index is not supported by any Soviet or
Western study of machinery prices. We still do not
have a clear explanation as to how the Soviets derive
their indexes, although we have gone to some length in
this paper to uncover the basis of their construction.
The indexes presented above represent our effort to
provide a better assessment of price change in the
Soviet MBMW sector. '
Which branches of machine building have the most
inflation also remains unclear. The findings of this
study are less than clearcut because, as noted earlier,
the eight kinds of machines in our sample account for,
at most, 16 percent of the gross output of MBMW.
Although our analyses suggest that price movements in
these branches may be fairly typical of price behavior
of machinery products, the evidence is not overwhelm-
ing; our sample is far too small to serve as a basis for
estimating an "average" rate of inflation in machine
building as a whole.
Impact of Inflation
Since inflation in Soviet machinery prices is not
uniform across all branches, inflation may weigh more
heavily on some end users than on others. As industrial
enterprises accelerate investment in modernization
and mechanization-for example, replacing existing
machinery and equipment with new and improved
machines-the share of investment chewed up by
inflation undoubtedly rises. Inflation in machinery also
raises the cost of consumer durables, both by increas-
ing the cost of components to consumer durables
manufacturers, and by higher prices charged to
consumers for such items as refrigerators, radios,
cameras, and the like.
The impact of inflation in machinery prices, however,
might be thought to be most severe in the production of
military hardware. As a result of Soviet efforts to
compete militarily with the West, defense has become
a high technology, innovative sector relative to the rest
of Soviet industry and thus may be most susceptible to
new-product pricing. On the other hand, it can be
countered that the defense industries are subject to
more effective quality control than other sectors of
industry. Military inspection teams are stationed at
enterprises to ensure that quality standards are met, to
monitor costs, and to oversee production. On balance,
however; the more rapid pace of innovation, product
obsolescence, and technological change in the military
sector probably means that the new-product pricing
effect outweighs other considerations.
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 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Appendix A
The Sample Data
Section A.1
Cranes
A-2
Table A.1.1
Boom Cranes on Rubber Tires
A-2
Table A.1.2
Boom Cranes on Tracks
A-5
Table A.1.3
Truck Cranes
A-8
Table A.1.4
Tower Cranes
A-10
Trucks
A-13
Trucks
A-13
Section A.3
Machine Tools
A-17
Table A.3.1
Lathes
A-17
Table A.3.2
Drilling and Boring Machines
A-18
Table A.3.3
Grinders
A- 19
Table A.3.4
Gear Cutting Machines
A-20
Table A.3.5
Milling Machines
A-21
Table A.3.6
Planers and Slotters
A-22
Section A.4
A-23
Table A.4.1
A-23
Table A.4.2
A-25
Table A.4.3
A-27
Table A.4.4
A-29
Table A.4.5
A-31
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Model
Price
(rubles)
Maximum Lift Capacity
Length
of
Horsepower
Weight Maximum Speed
(metric tons) of Raisin
Outriggers
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
g
the Hook
(meters/minute)
E-302
9,590
5
1.7
7.5
37
10.9
17.4
No
E-656
20,780
10
3.5
10
90
23.7
31.2
Yes
K-102
14,730
10
3
10
90
25
17.5
No
K-123
17,630
12
3
10
54
23
53.4
Yes
MKP-20
32,150
20
4.6
12.5
109
30
6.2
Yes
K-252
42,050
25
5
15
150
44.5
23
Yes
SKP-30/10
42,050
30
10
5
100
50
6
Yes
K-255
36,460
25
4
15
110
31.9
7.5
Yes
K-401
52,440
40
7
15
100
50
5
Yes
E-320
7,500
5
1.7
7.5
38
11.3
17.4
No
K-106
25,080
10
2
10
54
22
10
No
K-124
12,900
12
3
10
55
22
45
Yes
K-161
18,700
16
3.75
10
75
23.3
10
Yes
K-255
33,000
25
4
15
110
33
7.5
Yes
K-401
39,000
40
7
15
108
50
5
Yes
E-302A
9,865
5
1.7
7.5
45
10.6
25.8
No
K-106
12,840
10
2
10
54
22
10
No
K-124
16,820
12
3
10
55
22
45
Yes
K-161
20,100
16
3.75
10
75
23.3
10
Yes
K-255
30,244
25
4
15
110
33
7.5
Yes
MKP-25
33,630
25
5
12.5
100
39
6
Yes
MKP-40
69,470
40
4.5
15
180
48
4.4
Yes
K-401
40,452
40
7
15
108
50
5
Yes
K-631
83,400
63
7.5
15
180
69
5
Yes
K-1001
128,770
100
12
15
180
92
3
Yes
MKP-16
31,500
16
4
10
75
24
11
Yes
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Boom Cranes on Rubber Tires (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) of Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
K-161
20,100
16
3.75
10
75
23.7
10
Yes
K-255
30,240
25
4
15
110
33
7.5
Yes
MKP-40
69,470
40
4.5
15
180
48
4.4
Yes
K-631
83,400
63
7.5
15
180
69
5
Yes
K-1001
128,770
100
12
15
180
92
3
Yes
MKP-16
31,500
16
4
10
75
24
11
Yes
K-302B
9,870
5
1.7
7.5
50
11.93
31
No
K-166
26,000
16
3.5
12.5
75
23
6
Yes
K-255A
43,000
25
3
15
90
33
9
Yes
K-406
59,000
40
6.4
15
90
48
6
Yes
E-302A
9,865
5
1.7
7.5
45
10.6
25.8
No
K-106
12,840
10
2
10
54
22
10
No
K-124
16,820
12
3
10
55
22
45
Yes
K-161
20,100
16
3.75
10
75
23.7
10
Yes
K-255
30,244
25
4
15
110
33
7.5
Yes
MKP-25
32,600
25
5
12.5
100
29
6
Yes
MKP-40
57,000
40
4.8
15
180
45.2
4.4
Yes
K-401
40,416
40
7
15
109
50
5
Yes
K-631
83,400
63
7.5
15
180
69
5
Yes
K-1001
128,770
100
12
15
180
92
3
Yes
MKP-16
31,500
16
4
10
75
24
11
Yes
E-302A
9,120
5
1.7
7.5
38
10.6
25.8
No
K-161
18,985
16
3.75
10
75
23.7
10
Yes
K-255
29,120
25
4
15
110
33
7.5
Yes
MKP-25
32,600
25
5
12.5
100
39
6
Yes
K-401
38,980
40
7
15
108
50
5
Yes
K-631
83,400
63
7.5
15
180
69
5
Yes
MKP-16
31,500
10
4
10
75
24
11
Yes
K-166
23,900
16
3
12.5
75
23.7
6
Yes
K-255A
29,120
25
3.5
15
120
33
9
Yes
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Boom Cranes on Rubber Tires (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) of Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
K-161
18,990
16
3.75
10
75
23.7 12
Yes
K-255
27,225
25
4
15
110
31.9 7.5
Yes
MKP-25
31,085
25
5
12.5
100
39 6
Yes
MKP-40
49,500
40
4.8
15
180
45.2 4.4
Yes
K-401
36,410
40
7
15
108
50 5
Yes
K-631
75,000
63
7.5
15
180
70 5
Yes
K-1001
115,870
100
12
15
180
92 3
Yes
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 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model Price Maximum Lift Capacity Length Horsepower Weight Maximum Speed Outriggers
(rubles) of (metric tons) of Raising
At Minimum At Maximum Boom the Hook
Outreach Outreach (meters) (meters/minute)
(metric tons) (metric tons)
E-257
6,900
3
1.3
6.5
37
9.6
18
No
E-505
9,570
10
2.6
10
80
9.6
14.4
No
E-652
10,160
10
2.2
10
90
20.5
15.6
No
E-801
15,060
15
3.9
11
93
28.9
12.1
No
E-1004A
16,685
20
2.9
12.5
120
38.29
15.5
No
E-2006
39,700
50
8.2
15
250
77.2
12.1
No
EKG-4
88,790
75
15.5
20
119
190
7.6
No
E-1252
16,685
20
4
12.5
150
40.2
16
No
SKG-25
30,866
25
7.2
15
80
59.8
10.6
No
SKG-30/ 10
36,300
30
8
15
90
65
6
No
SKG-50
45,950
50
14.8
15
150
89.6
18
No
E-652
7,000
10
2
10
100
20.5
15.6
No
E-2006
39,700
50
8.2
15
300
76.2
8.5
No
EKG-4
72,125
75
15.5
20
419
190
7.6
No
E-1252
15,450
20
4
12.5
120
40.2
16
No
E-1258
25,300
20
3.9
12.5
120
40.8
14.4
No
DEK-25G
19,000
25
3.1
14
100
43.6
8.8
No
E-2508
39,700
80
13.8
14
300
77.7
13.8
No
E-156
5,500
15
.5
7.5
16
4.3
6.42
No
E-1251
13,300
20
4
12.5
116
37.5
16
No
E-1254
16,000
20
3.9
12.5
120
40.8
24
No
E-2006
36,000
50
8.2
15
250
77.2
12.1
No
MKE-6.3
19,160
6.3
1.5
10
75
15.9
19.4
No
E-252A
11,540
10 2.2
10
90
20.6
23.4
No
E-1001 IA
12,790
15 3.5
12.5
109
34.5
17.1
No
MKG-16
21,290
16 3.1
11
60
27.5
6.85
No
E-1252
20,540
20 4
12.5
130
38.4
16
No
E-1258
22,500
20 3.9
12.5
120
40.8
14.4
No
DEK-25G
23,740
25 3.1
14
109
41.3
8.8
No
SKG-40
40,370
40 8.3
15
120
57.6
6
No
DEK-50
68,960
50 14.8
15
150
89.1
5.1
No
E-2508
47,480
60 13.8
15
300
79
12.3
No
SKG-63
71,110
63 12.2
15
150
87.2
5
No
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Boom Cranes on Tracks (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) of Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
MKG-100
103,645
100
9
21
180
131.5
3
No
SKG-160
15,299
100
15.5
30
300
206
2.96
No
MKG-25
28,520
25
5.3
12.5
109
33
5.5
No
SKG-100
105,600
100
16.5
20
300
130.5
13
No
E-2503
63,200
60
13.8
15
160
NA
12
No
MKG-6.3
19,160
6.3
1.5
10
75
84.5
19.4
No
E-1001 IA
17,290
15
3.5
12.5
109
15.9
17.1
No
MKG-16
21,290
16
3.1
11
60
34.5
33
No
DEK-25G
23,740
25
3.1
14
108
27.2
8.8
No
SKG-40
40,370
40
8.1
15
120
38.8
6
No
DEK-50
68,970
50
14.8
15
150
57.8
5.1
No
E-2508
47,480
60
13.8
15
300
90.8
12.3
No
MKG-100
104,370
100
9
21
180
80.5
3
No
E-303B
8,745
5
1.5
7.5
50
131.5
24.4
No
MKG-10A
26,400
10
2.5
10
75
10.37
34
No
MKG-16M
31,000
16
4
10
75
20
33
No
E-1252B
20,540
20
3.9
12.5
130
25.3
15.5
No
E-1258B
22,500
20
4
12.5
130
37.1
21.6
No
MKG-25
28,500
25
5.2
12.5
108
39
6
No
ROK-25
39,600
25
47
12.5
108
42.6
7
No
E-2505
87,400
60
10
15
160
8.4
12
No
SKG-63A
71,110
63
12.2
15
150
87.2
5
No
SKG-100
105,600
100
16.7
20
300
132.5
13
No
MKG-6.3
19,160
6.3
1.5
10
75
15.9
19.4
No
E-652A
11,540
10
2.2
10
90
20.6
23.4
No
E-1001IA
17,290
15
3.5
12.5
108
35
17.1
No
MKG-16
21,290
16
3.1
11
60
27.2
33
No
E-1258
22,500
20
3.9
12.5
130
41.2
14.4
No
DEK-25G
21,100
25
3.1
14
108
39
8.8
No
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0
Boom Cranes on Tracks (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed Outriggers
(rubles)
of
(metric tons) of Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
SKG-40
40,370
40
8
15
120
57.8
6
No
DEK-50
59,000
50
14.8
15
150
90.8
5.1
No
E-2508
42,570
60
13.8
15
300
79
12.3
No
DEK-161
18,700
16
2.8
14
60
31.7
11.7
No
SKG-63
71,110
63
12.2
15
150
87.2
5
No
MKG-100
104,365
100
9
21
180
131.5
3
No
SKG-160
200,000
160
15.5
30
300
206
2.96
No
MKG-25
28,520
25
5.2
12.5
108
39
6
No
SKG-100
105,600
100
16.7
20
300
132.5
3.3
No
MKG-6.3
19,160
6.3
1.5
10
75
15.9
19.4
No
E-652A
12,000
10
2.2
10
82
20.6
23.4
No
MKG-16
21,900
16
3.1
11.5
60
27.2
33
No
E-1258
22,500
20
3.9
12.5
130
41.2
14.4
No
EEK-25G
21,100
25
3.1
14
108
39
8.8
No
SKG-40
40,370
40
8
15
120
57.8
6
No
DEK-50
59,000
50
14.8
15
150
90.8
5.1
No
E-2508
42,570
60
13.8
15
300
79
12.3
No
DEK-161
18,700
16
2.8
14
60
31.7
10.7
No
SKG-63
71,110
63
12.2
15
150
88.7
5
No
MKG-25
28,520
25
5.2
12.5
108
39
6
No
SKG-40
36,000
40
8.1
15
120
57.8
6
No
DEK-50
56,400
50
14.8
15
150
90.8
5.1
No
E-2508
40,400
60
13.8
15
300
79
12.3
No
DEK-161
18,700
16
2.8
14
60
33
11.7
No
SKG-63
62,364
73
12.2
15
150
88.7
5
No
SKG-100
123,600
100
16.7
20
300
132.5
3.3
No
MKG-100
104,370
100
9
21
180
131.5
3
No
SKG-160
134,170
160
15.5
30
300
206
2.96
No
Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model
Price
(rubles)
Maximum Lift Capacity
Length
of
Horsepower
Weight Maximum Speed
(metric tons) R
i
i
Outriggers
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
a
s
ng
the Hook
(meters/minute)
K-32
2,800
3
0.75
6.2
90
7.48
13
Yes
K-51
6,730
4
2
7.35
110
12.8
18
Yes
K-52
8,130
4
2
7.5
110
13
12
Yes
K-2.5-lEA
2,820
2.5
0.75
5.75
170
5.4
8.25
Yes
K-31
2,805
3
0.75
6.2
150
6.5
13.4
Yes
K-104
16,340
10
2.2
10
165
22.8
9
Yes
K-51
6,600
5
2
7.35
110
12.5
18
Yes
AK-5G
5,225
5
1
6.2
97
10
14.5
Yes
K-104
16,000
10
2.2
10
165
22.8
9
Yes
SMK-7
9,400
7.5
2
8.5
110
13.6
7.6
Yes
LAZ-690
2,800
3
0.75
6.2
90
6.8
12
Yes
KTS-3G
6,800
3
1.2
8.5
100
8.77
17.9
Yes
DEK-51
8,000
5
2
7.35
110
12.16
7
Yes
K-61
7,300
6
2
7.35
110
11.72
18
Yes
K-2.5-IEA
4,330
2.5
0.75
5.75
70
5.4
8.25
Yes
K-46
6,230
4
0.75
6.2
148
7.3
15.45
Yes
AK-75V
6,660
7.5
1.65
7.34
150
8.7
7.4
Yes
MKA-10M
19,570
10
1.4
10
180
14.6
18.3
Yes
K-162
28,365
16
4
10
180
23.6
12.7
Yes
AK-5G
21,695
16
2.8
10
180
21.8
16.2
Yes
KS-2561 D
6,600
5
1
6.2
150
8.3
14.5
Yes
K-67
6,800
6.3
1.5
8
150
8.9
10.5
Yes
K-104
13,700
6.3
2
8.4
180
11.6
6.5
Yes
19,000
10
2.2
10
165
22.8
10
Yes
K-25-1EA
4,330
2.5
0.75
5.75
70
5.4
18.25
Yes
K-46
6,230
4
0.75
6.2
150
7.3
18.45
Yes
AK-75V
6,600
7.5
1.65
7.34
150
8.7
18.4
Yes
MKA- 1OM
19,570
10
2.4
10
180
14.6
18.3
Yes
MKA-16
25,820
16
4
10
180
23.6
18.7
Yes
K-162
20,170
16
2.8
10
180
21.8
16.2
Yes
KS-1562
7,430
4
1.2
6
115
7.1
13
Yes
K-64
11,970
6.3
2
7.35
180
12.2
16.5
Yes
K-67
14,390
6.3
2
8.4
180
11.9
6.5
Yes
K-69
11,970
6.3
2
7.35
110
11.8
16.5
Yes
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0
Truck Cranes (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
SMK-7
15,000
7.5
2
8.5
110
13.9
7.6
K-104M
16,000
10
2.2
10
165
22.5
9
K-1014
(KS-3561)
16,000
10
1.0
10
180
13.8
12.5
K-2.5-1EA
4,330
2.5
0.75
5.75
70
5.06
8.25
Yes
K-46
6,230
4
4
6.2
148
7.3
9.95
Yes
AK-75V
7,790
7.5
7.5
7.5
150
8.7
7.4
Yes
MKA-16
25,820
16
16
10
180
22.5
12.7
Yes
K-162
19,775
16
16
10
180
21.8
8
Yes
KS-1562
7,430
4
4
6
115
7.3
13
Yes
AK-5G
6,420
5
5
6.2
150
8.3
14.5
Yes
KS-2561
6,988
6.3
6.3
8
150
8.9
10.5
Yes
K-64
11,403
6.3
6.3
7.35
180
12.2
16.5
Yes
MKA-IOM
(KS-1014)
19,000
10
10
10
180
14.6
18.3
Yes
K-46
6,230
4
0.75
6.2
148
7.3
9.95
Yes
AK-75V
6,500
7.5
1.65
7.5
150
8.7
7.4
Yes
MKA-10M
14,900
10
2.4
10
180
14.6
22.2
Yes
MKA-16
25,820
16
4
10
180
22.5
12.7
Yes
K-162
17,910
16
2.8
10
180
21.8
8
Yes
KS-1562
7,430
4
1.2
6
115
7.3
13
Yes
AK-5G
6,420
5
1
6.2
150
8.3
14.5
Yes
KS-2561 D
6,800
6.3
1.3
8
150
8.9
10.5
Yes
K-64
11,300
6.3
2
7.35
180
12.2
16.5
Yes
K-67
13,700
6.3
2
8.4
180
11.9
6.5
Yes
AK-75
6,500
7.5
1.65
7.5
97
8.85
7.8
Yes
MKA-100
11,720
10
2.2
10
110
15.2
22.2
Yes
K-2.5-IEA
3,900
2.5
0.75
5.75
70
5.06
8.25
Yes
K-46
5,610
4
0.75
6.2
148
7.3
9.95
Yes
MKA-16
22,300
16
4
10
180
23.6
12.7
Yes
K-162
17,500
16
2.8
10
180
21.8
8
Yes
KS-1562
6,250
4
1
6
115
7.5
13
Yes
KS-2561 D
6,805
6.3
1.5
8
150
8.8
10.5
Yes
K-67
13,000
6.3
2
8.4
180
11.9
6.5
Yes
Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model
Price
(rubles)
Maximum Lift Capacity
Length
of
Horsepower
Weight Maximum Speed
(metric tons) of R
i
i
Outriggers
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
ng
a
s
the Hook
(meters/minute)
BKSM-IM
3,278
1
0.5
13.3
11.6
12.5
21
No
SBK-I
6,240
3
1.5
20
40.4
42.4
30
No
SBK-IM
11,974
3
1.5
20
52
85
22.5
No
M-3-5-5
13,100
5
3
22
72.8
60.5
30
No
M-5-5-10
16,620
5
3
22
72.8
87.8
30
No
BKSM-5-5A
11,900
5
5
22
73
72
30
No
BKSM-5-10
16,525
5
5
22
75
89
30
No
S-391
2,492
1.5
0.5
7.55
12.6
6.8
20
No
KB-16
4,022
2
1
15.75
13.74
16
20
No
BK-215
6,110
3
1.5
18
36
24
32.5
No
MK-3-5-20
12,940
5
3
20
50
43
30
No
MK-5/20
15,020
5
5
20
44
53
30
No
KS-391
2,000
1.5
0.5
10
10.9
6.7
20
No
KB-16
4,500
2
1
16
19
16.65
35
No
MSK-5/20
16,500
5
5
20
44
53
30
No
BK-300
29,000
25
8
30
106
149
12
No
BK-1425
94,000
75
25
45
273
393
6.4
No
BKSM-
14PM2
18,800
5
5
30
45
77
12
No
S-419
6,000
5
3
20
53
56.1
30
No
BK-406A
35,000
25
13
40
97
236
12
No
KBGS-101M
67,000
25
10
40
233
210.5
60
No
KP-10
21,000
10
5
18
77
49.5
16
No
S-464A
14,000
5
5
20
60.8
52.7
30
No
BKSM-5-5B
17,300
8
8
22
73
72
30
No
MSK-8-20
23,000
5
5
20
44
58
15
No
MK-20-14
38,000
20
5
30
102
114
9.2
No
BK-405
37,000
40
15
36
97
237
7
No
SBK-1
6,210
3
1.5
20
40.4
43.5
30
No
SBK-IM
11,990
3
1.5
20
52
85
30
No
M-3-5-5
13,100
5
3
22
72.8
60.5
30
No
M-3-5-10
16,620
5
3
22
72.8
87.8
30
No
BKSM-5-5A
11,920
5
5
22
73
72
30
No
BKSM-5-10
16,525
5
5
22
73
90
30
No
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Tower Cranes (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) Raising
At Minimum
Outreach
At Maximum
Outreach
Boom
(meters)
the Hook
(meters/minute)
BK-215
6,110
3
1.5
18
36
24
32.3
No
MSK-3-5-20
12,880
5
3
20
50
45
30
No
MBTK-80
20,430
5
4
20
44.5
44
30
No
SBK-1
12,860
3
1.5
20
40.4
44
30
No
SBK-IM
29,640
3
1.5
20
52
85
30
No
M-3-5-5
17,120
5
3
22
72.8
60.7
30
No
M-3-5-10
33,460
5
3
22
72.8
87.8
30
No
BKSM-5-5A
24,150
5
5
22
73
72
30
No
BKSM-5-10
37,710
5
5
22
73
91
30
No
KB-16
5,695
2
1
16
20
16.65
35
No
BK-215
11,140
3
1.5
18
36
24
32.5
No
MSK-3-5-20
17,800
5
3
20
50
44
30
No
MSK-5/20
20,135
5
5
20
44
53
30
No
BK-300
46,600
25
8
30
106
149
12
No
BK-1000
104,225
50
16
45
262
294
10.7
No
BK-1425
149,635
75
25
45
273
393
6.4
No
MBTK-80
20,580
5
4
20
44.5
44
30
No
KB-60
17,070
5
3
20
44.5
38.2
30
No
KB-100.0
18,930
5
5
20
46
51.2
20
No
KB-100.1
19,730
5
5
20
46
52
20
No
KB-100.OM
21,930
5
5
20
46
70
20
No
MSK-5-20A
21,245
5
5
20
59
57
29
No
KB-160.IM
42,620
8
8
20
79
70
14.2
No
KB-160.2
38,765
8
5
25
79
78
15
No
KB-160.4
43,440
3
2
25
79
79.5
15
No
BKSM-
14PM2
23,508
5
5
30
45
77.3
12
No
BKSM-
14PM3
20,608
5
5
30
52
75.1
12
BKSM-5-5A
24,100
5
5
22
73
72
30
No
MSK-3-5-20
17,800
5
3
20
56
43
30
No
MSK-5/20
20,100
5
5
20
44
53
30
No
BK-300
45,300
25
8
30
106
149
12
No
BK-1000
103,600
50
16
45
262
294.5
10.7
No
BK-1425
149,600
75
25
45
273
393
6.4
No
KB-60
17,000
5
3
20
44.5
39.2
30
No
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0
Tower Cranes (continued)
Model
Price
Maximum Lift Capacity
Length
Horsepower Weight Maximum Speed
Outriggers
(rubles)
of
(metric tons) Raising
At Minimum
Outreach
(metric tons)
At Maximum
Outreach
(metric tons)
Boom
(meters)
the Hook
(meters/minute)
KB-100.0
18,700
5
5
20
46
52.6
20
No
KB-100.1
21,600
5
5
25
46
56
20
No
KB-100.OM
21,700
5
5
20
46
70
20
No
MSK-5-20A
21,200
5
5
20
65
57
29
No
KB-160.2
47,300
8
5
25
79
78
20
No
KB-160.4
59,500
3
2
25
79
79.5
15
No
BKSM-7-9
21,200
7
7
22
75
15
10
No
BKSM-7-5
17,300
7
7
22
68
88.7
16
No
KB-306
25,000
5
4
25
48
76.6
20
No
S-419
13,000
5
3
20
53
61.3
30
No
S-419M
16,800
5
3
20
60
74.6
30
No
T-266E
37,800
5
4
25
57
88
20
No
KB-100.2
30,000
5
4
25
51
65.3
20
No
BKSM-5-9
30,800
5
5
22
73
87.5
30
No
MSK-7.5-20
24,500
7.5
7.5
20
44
54
15
No
BK-406A
42,000
25
13
40
97
237
12
No
KBGS-101M
72,000
25
10
40
159
255
60
No
BK-404
41,200
40
18
30
97
236.5
7
No
MSK-5/20
19,720
5
5
20
44
53
30
No
BK-300
45,600
25
8
30
106
149
12
No
MBTK-80
20,430
5
4
20
44.5
44
30
No
KB-100.0
18,930
5
5
20
46
52
20
No
KB-100.OM
20,930
5
5
20
46
70
20
No
MSK-5.20A
20,720
5
5
20
65
57
29
No
KB-160.IM
42,620
8
8
20
79
80
20
No
KB-160.2
34,065
8
5
25
79
78
20
No
KB-160.4
37,940
3
2
25
79
79.5
40
No
BKSM-
14PM2
20,660
5
5
30
71
77
30
No
BKSM-
14PM3
20,610
5
BKSM-7-5
KB-306
17,600
19,360
7
5
7
4
22
25
75
48
88.7
76.6
16
20
No
No
Approved For Release 2008/09/15: CIA-RDPO8SO135OR000100150001-0 __
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Section A.2
Model
Price
(rubles)
Hauling
Capacity
Weight
(metric tons)
Maximum
Speed
Fuel
Consumption
Engine
(metric tons)
(km/hr)
(liters/l00 km)
Horsepower
Cylinders
GAZ-51
1,050
2.5
2.71
70
26.5
70
6
GAZ-51A
1,050
2.5
2.71
70
20
70
6
GAZ-51B
1,260
2.0
3.1
65
24
56
6
GAZ-63
1,330
2.0
3.2
95
29
70
6
GAZ-93
1,240
2.25
3.1
70
28
70
6
GAZ-93A
1,240
2.25
3.0
70
20
70
6
UAZ-450D
2,000
0.8
1.7
90
14
62
4
ZIS-150
1,370
4
3.9
75
37
90
6
ZIS-151
2,125
4.5
5.58
60
42
92
6
ZIL-164
1,370
4
4.1
75
27
97
6
ZIL-157
2,125
4.5
5.8
65
42
109
6
ZIL-585
1,520
3.5
4.21
65
40
90
6
MAZ-200
3,520
7
6.4
65
32
120
4
MAZ-200G
3,730
7
6.75
65
32
110
4
MAZ-205
3,520
6
6.6
52
35
120
4
MAZ-525
23,700
2.5
22.0
30
160
300
12
URAL-355M
1,800
3.5
3.4
75
24
95
6
KAZ-585V
1,520
3.5
4.4
65
40
90
6
GAZ-93
1,240
2.25
3.1
70
28
70
6
ZIS-150
1,370
4
3.9
75
37
90
6
ZIS-151
2,125
4.5
5.58
60
42
92
6
ZIL-164
1,540
4
4.1
75
27
97
6
ZIL-157
2,400
4.5
5.8
65
42
109
6
ZIL-130
1,700
4
4.27
94
27
150
8
ZIL-585
1,680
3.5
4.21
65
40
90
6
MAZ-200
3,520
7
6.4
65
32
120
4
MAZ-205
3,520
6
6.6
52
35
120
6
MAZ-500
3,520
7.5
6.5
75
25
180
6
MAZ-525
23,700
25
24.38
30
135
300
12
MAZ-530
50,000
40
38.4
43
200
450
12
KAZ-600
2,400
3.5
4.525
65
29
93
6
KRAZ-214
8,610
7
12.3
55
70
205
6
KRAZ-219
6,200
12
11.3
55
60
180
6
KRAZ-222
6,470
10
12.2
47
65
180
6
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Trucks (continued)
Price
(rubles)
Hauling
Capacity
Weight
(metric tons)
Maximum
Speed
Fuel
Consumption
Engine
(metric tons)
(km/hr)
(liters/ 100 km)
Horsepower
Cylinders
GAZ-51A
1,030
2.5
2.11
70
20
70
6
GAZ-51B
1,445
2
3.1
65
24
56
6
GAZ-63
1,330
2
3.3
95
30
70
6
GAZ-63A
1,440
2
3.44
65
25
70
6
GAZ-53
3,050
3
3.06
80
22
115
8
GAZ-53A
2,200
4
3.25
85
24
115
8
GAZ-93B
1,260
2.25
3.0
70
20
70
6
GAZ-66
3,550
2
3.47
95
24
115
8
GAZ-69
1,270
0.5
1.525
90
14
55
4
UAZ-450D
1,700
0.8
1.7
90
14
62
4
UAZ-451
1,690
0.8
1.52
90
14
70
4
UAZ-451D
1,650
0.8
1.50
95
12
70
4
UAZ-451DM
1,600
1
1.51
100
12
70
4
ZIL-157K
2,450
4.5
5.8
65
42
110
6
ZIL-130
2,800
5
4.3
70
28
150
8
ZIL-MMZ-555
2,900
4.5
3.69
80
27
150
8
MAZ-200
3,520
7
6.4
60
36
120
4
MAZ-200G
3,730
7
6.75
65
32
110
4
MAZ-502
4,450
4
7.7
50
32
135
6
MAZ-502A
4,800
4
7.8
50
32
135
6
MAZ-501
4,300
5
7.6
45
32
120
6
MAZ-503
6,560
7
6.75
70
24
180
6
MAZ-525
23,700
25
24.38
30
135
300
12
URAL-355M
1,700
3.5
3.4
75
24
95
6
KAZ-600V
2,200
3.5
4.525
65
29
93
6
GAZ-5AZ-53B
3,050
3.5
3.75
85
24
115
8
KRAZ-214
8,600
7
12.3
55
70
205
6
KRAZ-219
6,200
12
11.3
55
60
180
6
KRAZ-222
6,470
10
12.2
47
65
180
6
GAZ-63
1,600
2
3.2
95
12
70
6
GAZ-53A
2,660
4
3.25
85
24
115
8
GAZ-93B
1,475
2.5
3.0
70
20
70
6
GAZ-50-03
1,500
2.5
2.815
70
21
75
6
GAZ-66
3,550
2
3.47
95
24
115
8
ZIL-157K
3,085
4.5
5.8
65
42
110
6
ZIL-130
3,100
5
4.3
90
28
150
8
ZIL-MMZ-555
3,370
4.5
3.69
90
27
150
8
MAZ-500
5,810
7.5
6.5
75
25
180
6
MAZ-503B
6,000
7
6.75
75
24
180
6
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Trucks (continued)
Model
Price
(rubles)
Hauling
Capacity
Weight
(metric tons)
Maximum
Speed
Fuel
Consumption
Engine
(metric tons)
(km/hr)
(liters/ 100 km)
Horsepower
Cylinders
URAL-3775
7,700
7.5
7.06
60
58
180
8
GAZ-5A2-53B
3,700
3.5
3.75
85
24
115
8
KRAZ-214B
9,800
7
12.1
55
50
205
6
KRAZ-219B
8,300
12
11.3
55
55
180
6
KRAZ-256B
8,420
11
11.4
65
38
240
8
KRAZ-256
8,070
10
11.4
62
45
240
8
BELAZ-540
24,500
27
20.925
55
100
375
12
GAZ-51A
1,200
2.5
2.71
70
20
70
6
GAZ-63
1,600
2
3.2
95
12
70
6
GAZ-53A
2,600
4
3.25
85
24
115
8
GAZ-93B
1,475
2.25
3.0
70
20
70
6
GAZ-52-03
1,500
2.5
2.815
70
21
75
6
GAZ-66
3,550
2
3.47
95
24
115
8
ZIL-157K
3,085
4.5
5.8
65
42
110
6
ZIL-130
3,100
5
4.3
90
28
150
8
ZIL-MMZ-555
3,370
4.5
4.5
80
27
150
8
MAZ-200
3,300
4.7
6.4
60
36
120
4
MAZ-205
3,300
6
6.6
52
35
120
4
MAZ-500
5,810
7.5
6.5
75
22
180
6
MAZ-503B
6,000
7
6.75
75
24
180
6
MAZ-525
17,500
25
24.38
30
135
300
12
MAZ-530
36,000
40
38.4
43
200
450
12
MAZ-537
44,000
50
22
55
125
525
12
URAL-377S
7,700
7.5
7.06
60
58
180
8
KAZ-600V
2,380
3.5
4.525
65
29
93
6
KAZ-608
4,450
10.5
4.0
75
40
150
8
GAZ-SAZ-53B
3,700
3.5
3.75
85
24
115
8
KRAZ-219B
8,300
12
11.3
55
55
180
6
KRAZ-255B
10,290
7.5
11.95
71
40
240
8
KRAZ-256B
8,420
11
11.4
65
38
240
8
KRAZ-256
8,070
10
11.4
62
45
240
8
KRAZ-540
24,500
27
20.925
55
100
375
12
BELAZ-548A
36,200
40
26.925
55
125
520
12
GAZ-51A
1,200
2.5
2.71
70
20
70
6
GAZ-53A
2,565
4
3.25
85
24
115
8
GAZ-93B
1,475
2.25
3.0
70
20
70
6
GAZ-52-03
1,500
2.5
2.815
70
21
75
6
GAZ-69
1,490
0.5
1.525
90
14
52
4
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Trucks (continued)
Model
Price
(rubles)
Hauling
Capacity
Weight
(metric tons)
Maximum
Speed
Fuel
Consumption
Engine
(metric tons)
(km/hr)
(liters/ 100 km)
Horsepower
Cylinders
UAZ-451 DM
1,600
1
1.51
100
12
70
4
ZIL-157K
3,085
4.5
5.8
65
42
110
6
ZIL-130
3,200
5
4.3
90
28
150
8
ZIL-130G
3,320
5
4.57
90
28
150
8
ZIL-131
5,800
5
6.46
80
40
150
8
ZIL-131V
5,800
10.5
4.0
75
40
150
8
ZIL-MMZ-555
3,470
4.5
3.69
80
27
150
8
MAZ-500A
6,050
8
6.6
85
22
180
6
MAZ-503A
6,200
8
7.1
75
22
180
6
MAZ-504A
5,900
17.75
6.4
85
32
180
6
URAL-3750
9,100
4.5
8.4
75
48
180
8
URAL-3775
7,700
7.5
7.06
60
58
180
8
KRAZ-255B
11,300
7.5
11.95
71
40
240
8
KRAZ-256B
8,420
11
11.4
65
38
240
8
KRAZ-257
8,270
12
11.13
55
55
215
8
BELAZ-540
24,500
27
20.725
55
100
375
12
B::LAZ-548A
36,200
40
26.925
55
120
520
12
GAZ-51A
1,200
2.5
2.71
70
20
70
6
GAZ-53
2,565
3
3.06
80
22
115
8
GAZ-52-03
1,500
2.5
2.815
70
21
75
6
GAZ-66
3,720
2
3.47
95
24
115
8
UAZ-451 DM
1,600
1
1.51
100
12
70
4
UAZ-451M
1,800
1
1.6
90
14
90
4
UAZ-452D
1,760
0.8
1.67
95
13
71
4
ZIL-130
3,290
5
4.3
90
28
150
8
ZIL-131
5,800
5
6.46
80
40
150
8
ZIL-MMZ-555
3,470
4.5
3.69
90
27
150
8
MAZ-500A
6,120
8
6.60
85
22
180
6
MAZ-503A
6,250
8
7.10
75
22
180
6
URAL-3750
9,100
4.5
8.40
75
48
180
8
URAL-377
7,900
7.5
7.27
75
48
175
8
GAZ-SAZ-53B
3,310
3.5
3.75
85
24
115
8
KRAZ-256B
8,420
11
11.4
65
38
240
8
KRAZ-256
8,270
10
11.5
62
45
240
8
KRAZ-257
8,000
12
11.5
62
36
240
8
BELAZ-540A
26,000
27
20.925
55
100
360
12
BELAZ-548A
36,200
40
26.925
55
120
520
12
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0 --
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Price
Maximum Diameter Power of
Weight
Machine
Manual (M)
Precision
(rubles)
of Bar Stock
(millimeters)
Main Drive
(kilowatts)
(metric tons)
Dimensions
(cubic meters)
Automatic (A)
Instrument
1B124
2,500
25
4.2
1.75
2.216
A
1B125
5,200
25
4.5
2.15
2.537
A
1B136
2,500
36
4.5
1.75
2.216
A
1B140
5,200
40
7.0
2.2
2.537
A
1341
2,300
40
4.5
2.2
5.76
M
1A616
1,130
34
4.5
1.5
3.461
M
1A616P
1,600
34
4.5
1.5
3.461
M
1 K62 (710-mm)
1,405
36
10
2.161
3.944
M
1K62 (1,400-mm)
1,470
36
10
2.401
5.022
M
1A64
6,920
80
20
11.7
19.399
M
1B136
4,290
36
4.5
1.75
2.260 A
18140
8,180
40
7.0
2.3
2.537 A
1341
3,830
40
5.5
2.2
5.76 M
1 K62 (710-mm)
2,000
45
7.5
2.080
3.893 M
1 K62 (1,400-mm)
2,600
45
10
2.290
4.959 M
IA64
7,870
80
17
11.7
19.399 M
165 (2,800-mm)
8,580
80
22
12.5
20.504 M
165 (5,000-mm)
9,700
80
22
15.650
29.146 M
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Price
Maximum Diameter Power of
Weight
Machine
Manual (M)
Precision
(rubles)
of Hole Bored
(millimeters)
Main Drive
(kilowatts)
(metric tons)
Dimensions
(cubic meters)
Automatic (A)
Instrument
2170
2,590
75
10.0
3.6
6.423
M
2A430
6,700
60
2.0
1.93
4.070
M
P
2N57
5,700
75
7.0
9.5
21.743
M
2B635
34,200
160
14
26.0
102.375
M
278
1,750
165
1.7
2.25
7.452
M
278L
1,630
165
1.7
1.65
2.457
M
278N
1,680
165
1.7
1.85
2.808
M
2170
3,280
75
10.0
3.75
6.851
M
2A430
7,130
60
2.0
2.33
3.070
M
2N57
10,780
75
7.5
9.5
21.743
M
2B635
31,530
160
14
27.9
103.605
M
278
1,930
165
2.2
2.25
7.587
M
278L
1,380
165
2.2
1.45
2.478
M
278N
1,260
165
2.2
1.85
2.880
M
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Price
Maximum Diameter Power of
Weight
Machine
Manual (M)
Precision
(rubles)
of Bar Stock
(millimeters)
Main Drive
(kilowatts)
(metric tons)
Dimensions
(cubic meters)
Automatic (A)
Instrument
3B151
4,020
200
7.0
3.8
9.765
M
3A151
4,480
200
7.0
3.8
9.765
A
3B161
4,260
280
7.0
4.5
13.104
M
3G182
3,300
25
7.0
2.45
2.867
A
3722
6,920
0.320'
10
7.0
15.265
A
3B722
5,500
0.320'
10
6.2
15.774
A
3B732
5,100
0.256'
14
6.4
13.804
A
3B151
5,500
200
7.5
4.2
9.765
M
3A151
5,720
200
7.5
4.2
9.765
A
3B161
5,530
280
7.5
4.5
13.432
M
3G182
4,140
25
5
2.467
3.636
A
3A227
6,500
400
3.0
3.1
6.146
M
3722
9,350
0.320'
10.0
7.3
15.774
A
3B722
7,320
0.320'
10
7.1
15.774
A
3B732
6,990
0.256'
14
6.5
14.308
A
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Gear Cutting Machines
Price
(rubles)
Maximum Wheel
Diameter
(millimeters)
Power of
Main Drive
(kilowatts)
Weight
(metric tons)
Machine
Dimensions
(cubic meters)
Manual (M)
Automatic (A)
Precision
Instrument
5107
1,650
80
0.6
0.850
0.622
M
5V12
1,850
208
1.7
1.85
2.275
M
5P23A
6,320
125
1.7
1.60
2.080
A
5A27S-4
14,100
500
4.5
8.0
5.545
A
528S
19,340
800
10
12.2
11.915
A
5A283
23,500
1,600
7
21.0
24.905
A
5350
4,500
150
7
3.65
5.959
A
5350B
5,000
150
7
4.150
7.877
A
5350V
5,200
150
7
4.550
9.156
A
5822
16,500
200
4.5
3.90
7.148
M
5831
8,670
320
0.75
4.5
15.078
A
5107
2,400
80
0.6
0.850
0.622
M
5V12
2,610
208
1.7
1.85
2.258
M
5P23A
7,440
125
1.7
1.80
2.080
A
5A27S-4
22,370
500
4.5
8.12
6.299
A
528S
22,430
800
10
14.00
11.915
A
5A283
25,470
1,600
7
19.0
26.159
A
5350
5,350
150
7
3.65
5.997
A
5350B
6,510
150
7
4.150
7.915
A
5350V
7,160
150
7
4.550
9.194
A
5822
11,450
200
4.5
3.85
7.522
M
5831
11,420
320
0.75
4.75
15.078
A
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Price
(rubles)
Diameter of
Work Sheet
(square meters)
Power of
Main Drive
(kilowatts)
Weight
(metric tons)
Machine
Dimensions
(cubic meters)
Manual (M)
Automatic (A)
Precision
Instrument
6MI3K
5,600
6.4
7
4.7
13.221
M
675
1,850
1.0
1.7
1.63
1.690
M
676
2,165
0.151
2.8
1.10
2.673
M
6M13K
5,490
6.4
7.5
4.7
13.271
M
6610
34,850
4
52
39
186.376
t1l
675
2,000
1.0
1.7
1.63
1.760
M
676
2,370
0.158
2.2
1.385
2.584
M
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Price
(rubles)
Diameter of
Work Sheet
(square meters)
Power of
Main Drive
(kilowatts)
Weight
(metric tons)
Machine
Dimensions
(cubic meters)
Manual (M)
Automatic (A)
Precision
Instrument
7110
15,000
2.7
40
30.750
101.907
M
7210
14,420
2.7
40
27.5
113.32
M
7212
17,800
4.48
55
35
170.677
M
7A256
46,900
10.8
118
65
412.322
M
7A278
81,150
20
118
117
762.586
M
7M36
2,300
0.315
7.0
3.2
8.675
M
7M37
12,600
0.560
10
4.5
13.024
M
745A
11,200
.
28
19.0
72.950
M
713705V
3,800
...
10
3.4
8.788
M
7110
20,000
2.7
40
27.500
102.165
M
7210
20,690
2.7
40
27.5
106.419
M
7212
24,000
4.48
55
35
165.608
M
7A256
87,150
10.8
110
68.7
411.474
M
7A278
147,850
20
110
122.8
909.703
M
7M36
3,830
0.315
7.5
3.3
8.878
M
7M37
4,100
0.560
10
4.5
13.024
M
745A
16,410
28
17.0
72.950
M
713705V
5,470
...
10
3.93
9.646
M
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0 -
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Section A.4
Construction and Road Machinery
Model
Price
(rubles)
Blade
Size'
(square
meters)
Horse-
power
Weight
(metric
tons)
Control
Mech-
anism'
1961
D-159
2,150
1.824
54
6.2
H
D-159b
2,070
1.801
54
6.18
H
D-259A
4,050
4.048
90
14.0
C
D-271
3,950
3.333
80
13.3
C
D-175
22,600
5.193
140
18.97
C
D-312
2,600
1.000
37
4.10
H
D-315
2,400
2.80
54
7.92
H
D-347
1,310
0.65
14
1.85
H
D-444
2,080
2.048
54
6.25
H
D-449
2,565
1.10
45
3.59
H
D-459
2,450
2.80
55
7.24
H
D-492
4,050
3.782
100
14.0
C
D-535
2,720
2.048
75
6.56
H
bu-55
2,540
2.00
54
7.203
H
1965
D-159b
2,330
1.824
54
6.290
H
D-271A
4,350
3.333
100
13.33
C
D-275A
15,600
4.640
180
17.50
C
D-384
45,000
5.40
300
28.535
H
D-444
2,250
2.048
54
6.080
H
D-492A
4,600
3.861
100
14.00
C
D-493A
5,400
3.950
100
13.90
H
D-521
18,350
3.685
180
17.975
H
D-522
20,000
4.020
180
18.050
H
D-535
2,650
2.12
75
6.370
H
D-579
2,580
1.80
50
3.00
H
bu-55
2,470
2.00
54
6.850
H
D-494A
5,300
3.366
100
13.53
H
1967
D-275A
20,350
4.640
180
17.5
C
D-444
3,070
2.048
54
6.25
H
D-492A
5,640
3.861
108
14.0
C
Bulldozers (continued)
Model
Price
(rubles)
Blade
Size"
(square
meters)
Horse-
power
Weight
(metric
tons)
Control
Mech-
anism'
D-522
24,800
5.316
180
17.85
H
D-535
3,160
2.048
75
6.560
H
D-579
3,210
1.20
50
3.00
H
D-686
6,250
3.84
108
14.1
C
D-687
7,200
3.84
108
14.0
H
bu-55
3,720
2.00
54
6.85
H
D-572
45,300
6.892
300
28.920
H
1970
D-712
5,000
2.048
75
8.10
H
D-689
8,500
3.053
110
10.50
H
D-685
7,000
2.752
110
10.18
H
D-572c
48,600
7.037
300
31.38
H
D-159b
3,270
1.847
54
6.3
H
D-271
5,250
3.333
100
13.3
C
D-275A
20,350
3.685
140
18.1
C
D-444
3,070
2.048
54
6.25
H
D-449
3,210
1.10
48
3.59
H
D-492
5,640
3.861
100
6.25
H
D-493A
6,740
3.94
100
13.98
H
D-521
22,400
3.685
180
17.97
H
D-522
24,800
5.316
180
19.32
H
D-535
3,160
2.016
75
6.56
H
D-579
3,210
1.30
50
3.30
H
D-606
4,430
2.048
75
7.0
H
D-686
6,250
3.840
108
14.113
C
D-687
7,200
3.840
108
14.00
H
bu-55
3,720
2.150
54
6.85
H
D-572
45,300
7.037
300
31.38
H
D-575A
22,600
4.477
180
18.2
H
D-444A
3,070
2.016
54
6.410
H
D-492A
5,850
4.169
108
14.015
C
D-521A
20,800
5.387
180
18.255
C
D-607
4,850
2.80
75
8.90
H
* Footnotes appear at end of table.
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Bulldozers (continued)
Model
Price
(rubles)
Blade
Size'
(square
meters)
Horse-
power
Weight
(metric
tons)
Control
Mech-
anism 2
1973
D-384A
43,730
6.975
271
28.535
H
D-492A
5,740
4.334
108
14.0
C
D-493A
6,740
3.900
108
14.7
H
D-521
23,740
5.292
180
18.340
H
D-522
23,065
5.316
180
19.320
H
D-532c
19,900
4.160
140
13.350
H
D-535
3,050
2.048
74
6.37
H
D-579
3,370
1.300
50
3.50
H
D-606
3,980
2.016
75
6.925
H
D-607
5,300
2.80
75
8.484
H
D-686
5,960
3.84
108
14.113
C
D-687
7,250
3.84
108
13.956
H
D-687A
8,250
3.84
108
13.780
H
D-687c
7,250
3.84
108
13.710
H
D-535A
3,050
2.048
74
6.370
H
D-572
45,700
6.975
271
31.380
H
D-694A
10,440
4.368
108
17.100
H
D-444A
3,050
2.016
54
6.410
H
' Length times height.
2 H = hydraulic, C = cable.
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0 ----
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model
Price
Speed While
Weight
Horsepower
Self-Propelled (S) With/Without Smooth (S) Pneumatic
Width of
(rubles)
Working in
First Gear
(km/hr)
w/o Ballast
(metric tons)
Towed (T)
Vibrator
Rough Roller (R)Tires
Rolled
Strips
(meters)
D-219
1,200
"
1.83
T
W/o
S
Yes
2.20
D-263
3,130
6.5
T
W/o
S
Yes
2.50
D-211
2,170
1.7
10.0
40
S
W/o
S
No
1.80
D-211 B
2,600
1.8
10.0
40
S
W/o
S
No
1.8
D-220
2,100
13.3
T
W/o
R
No
2.73
D-326
7,100
13.2
T
W/o
S
Yes
3.30
D-399
4,100
2.5
8.6
40
S
W/o
S
No
1.30
D-399A
3,740
2.51
8.6
55
S
W/o
S
No
1.3
D-400
4,750
2.5
10.8
30
S
W/o
S
No
1.30
D-400A
4,340
2.8
10.8
55
S
W/o
S
No
1.3
D-455
2,900
1.35
1.4
8
S
w
S
No
0.85
D-469
2,800
2.13
6.9
28
S
W/o
S
No
1.8
D-126A
320
2.6
54
T
W/o
S
No
1.30
D-178B
4,750
3.5
13.9
40
S
W/o
S
No
1.30
D-260
1,520
2.05
6
30
S
W/o
S
No
1.70
D-338
1,100
2.3
0.88
6
S
W/o
S
No
0.70
D-3175
2,700
1.7
3.0
14
S
w
S
No
1.00
D-365
8,700
3.04
10.7
100
S
W/o
S
Yes
2.60
D-484
1,150
1.80
1.35
8
S
w
S
No
0.73
D-130B
460
...
3.3
...
T
W/o
R
No
1.51
D-219
1,200
1.8
T
W/o
S
Yes
2.20
D-263
3,130
5.25
T
W/o
S
Yes
2.50
D-211
2,170
1.8
10.0
40
S
W/o
S
No
1.80
D-220
2,100
13.3
T
W/o
R
No
2.73
D-326
7,100
13.25
T
W/o
S
Yes
3.3
D-399
4,350
2.51
8.6
55
S
W/o
S
No
1.3
D-400
5,000
2.5
10.8
55
S
W/o
S
No
1.3
D-480
2,150
3.0
T
w
S
No
1.4
D-130B
460
3.3
T
W/o
R
No
1.50
D-126A
320
2.6
T
W/o
S
No
1.30
D-1785
4,750
3.5
13.9
40
S
W/o
S
No
1.30
D-260
1,520
2.15
6.0
30
S
W/o
S
No.
1.70
D-130A
460
3.20
T
W/o
R
No
1.30
D-242
5,000
10.0
T
W/o
S
Yes
3.00
D-390
5,000
...
13.9
40
T
W/o
S
No
1.30
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Rollers (continued)
Model
Price
Speed While
Weight
Horsepower
Self-Propelled (S) With/Without Smooth (S) Pneumatic
Width of
(rubles)
Working in
First Gear
(km/hr)
w/o Ballast
(metric tons)
Towed (T)
Vibrator
Rough Roller (R)Tires
Rolled
Strips
(meters)
D-219
1,170
1.9
T
W/o
S
Yes
2.20
D-263
2,700
5.65
T
W/o
S
Yes
2.50
D-21 I B
2,500
1.8
10.0
50
S
W/o
S
No
1.80
D-220
2,520
13.3
T
W/o
R
No
2.73
D-326
7,000
13.3
T
W/o
S
Yes
3.30
D-399A
3,450
2.8
8.6
55
S
W/o
S
No
1.30
D-400A
4,000
2.8
10.8
55
S
W/o
S
No
1.30
D-455
2,900
1.33
1.4
8
S
w
S
No
0.85
D-469A
2,250
2.43
6.4
40
S
W/o
S
No
1.80
D-480
2,200
3.0
T
w
S
No
1.40
D-614
820
5.0
T
W/o
R
No
1.80
D-627
9,500
7.54
9.0
110
S
W/o
S
Yes
1.7
D-630
1,480
9.0
T
W/o
R
No
2.60
D-1305
620
3.74
T
W/o
R
No
1.500
D-613
3,800
1.8
3.2
18
S
w
S
No
1.00
D-634
3,800
2.13
6.0
28
S
w
S
No
1.00
D-615
1,650
18.0
T
W/o
R
No
3.60
D-263
3,520
...
5.65
...
T
w/o
...
Yes
2.5
D-211 B
3,750
1.85
10.0
50
S
W/o
S
No
1.8
D-220
3,800
13.3
T
W/o
R
No
2.8
D-399A
3,370
2.8
8.6
50
S
W/o
S
No
1.3
D-400A
4,000
2.8
11.3
50
S
W/o
S
No
1.3
D-469A
2,820
2.43
6.4
40
S
W/o
S
No
1.8
D-614
1,380
5.0
T
W/o
R
No
1.8
D-627
17,930
7.54
9.0
110
S
W/o
Yes
1.62
D-630
3,130
9.0
T
W/o
R
No
2.6
D-5515
(tyagach)
21,300
15
20.4
240
S
W/o
S
Yes
2.8
D-455A
D-613A
1,850
2,440
1.8
2.17
1.5
6.0
8
18
S
S
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0 _ _
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Excavators, Single Bucket
Model
Price
(rubles)
Shovel
Capacity
(cubic
meters)
Horse-
power
Weight
(metric
tons)
Type of
Tracking
1960
E-153
5,200
0.15
40
5.3
R
E-157A
4,953
0.15
18
4.8
C
E-257
6,500
0.25
37
9.32
C
E-302
9,100
0.3
48
11.0
R
E-652
10,200
0.65
80
20.5
C
E-752
10,650
0.75
93
33.3
C
E-754
10,650
0.75
93
29.7
C
E-1004A
17,100
1.0
120
39.5
C
E-1004
16,185
1.0
120
39.5
C
E-1252
17,300
1.25
150
40.2
C
E-2001
35,000
2.0
190
80
C
E-2002
39,000
2.0
250
79.2
C
1961
E-153
5,200
0.15
37
5.3
R
E-156
4,950
0.15
16
4.27
C
E-155
4,950
0.15
16
4.3
R
E-221
5,490
0.22
40
5.3
R
E-257
6,500
0.25
37
9.32
C
E-302
9,100
0.3
38
11.0
R
E-504A
9,340
0.5
54
21.7
C
E-505A
9,540
0.5
80
20.5
C
E-652
10,200
0.65
90
20.5
C
E-1004A
17,100
1.0
120
39.3
C
E-1251
15,145
1.25
108
39.5
C
E-1252
17,300
1.25
120
40.2
C
E-2001
35,000
2.0
190
80
C
E-2002
39,000
2.0
250
79.2
C
E-1003A
14,945
1.0
150
39.5
C
1966
E-153
5,200
0.15
37
5.3
R
E-157A
4,953
0.15
20
5.23
C
E-257
6,500
0.25
37
9.35
C
E-302
9,100
0.3
38
11.0
R
E-303
6,500
0.3
38
9.6
C
E-304
6,650
0.3
38
12.0
C
E-652
10,200
0.65
90
20.5
C
E-653
9,000
0.65
100
24.2
C
Excavators, Single Bucket (continued)
Model
Price
(rubles)
Shovel
Capacity
(cubic
meters)
Horse-
power
Weight
(metric
tons)
Type of
Tracking'
E-752
10,650
0.75
80
33.3
C
E-754
10,650
0.75
80
33.3
C
E-1251
12,170
1.25
116
39.5
C
E-1252
17,300
1.25
120
40.2
C
E-2001
35,000
2.0
190
80
C
1967
E-153
5,120
0.15
50
5.3
R
E-157A
5,000
0.15
18
5.0
C
E-3025
10,420
0.4
48
11.7
R
E-304A
8,050
0.4
48
12.0
C
E-302A
9,120
0.4
48
11.7
R
E-303A
8,000
0.4
49
10.8
C
E-3038
10,800
0.4
48
10.8
C
E-3045
9,350
0.4
48
12.0
C
E-304B
10,200
0.4
48
13.7
C
E-352A
7,900
0.4
48
13.0
C
E-652
10,200
0.65
100
20.5
C
E-652A
12,000
0.65
82
21.2
C
E-6525
13,505
0.65
82
21.2
C
E-1252
22,135
1.25
130
39.3
C
E-1252B
24,435
1.25
130
40
C
E-1602
68,345
1.6
185
56.4
C
E-2503
63,200
2.5
160
94.0
C
E-4010
23,794
0.4
75
18.4
C
E-5015
18,000
0.5
75
11.25
C
E-1001 IA
19,590
1.0
108
35
C
E-2505
84,205
2.5
218
89
C
1969
E-153
5,120
0.15
50
5.3
R
E-157A
5,000
0.15
18
5.19
C
E-302B
10,420
0.4
48
11.7
R
E-304A
8,050
0.4
48
12.1
C
E-302A
9,120
0.4
48
11.6
R
E-303A
8,000
0.4
48
12.7
C
E-303B
10,800
0.4
48
10.8
C
E-304A
9,350
0.4
48
12.1
C
E-304B
10,200
0.4
48
13.7
C
E-652A
12,000
0.65
90
21.5
C
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Excavators, Single Bucket
Model
Price
(rubles)
Shovel
Capacity
(cubic
meters)
Horse-
power
Weight
(metric
tons)
Type of
Tracking
E-652B
13,505
0.65
82
21.25
C
E-1602
68,345
1.6
180
56.4
C
E-2503
63,200
2.5
218
94
C
E-4010
23,794
0.4
75
18.4
C
E-5015
18,000
0.5
75
11.2
C
E-2505
84,205
2.5
218
89
C
1970
E-153
5,480
0.15
48
5.3
R
E-157A
5,390
0.15
18
5.24
C
E-302B
10,000
0.4
50
11.7
R
E-304A
8,050
0.4
50
12.07
C
E-302A
9,120
0.4
48
11.7
R
E-304B
8,350
0.4
50
12.07
C
E-304V
10,200
0.4
50
13.7
C
E-352A
7,900
0.4
48
13.0
C
E-652A
13,245
0.65
82
21.5
C
E-6525
14,745
0.65
82
21.25
C
E-1251 B
24,105
1.25
116
40.6
C
E-1252B
23,705
1.25
130
40
C
E-1602
59,000
1.60
180
56.4
C
E-2503
57,000
2.5
218
94.0
C
Excavators, Single Bucket (continued)
Model
Price
(rubles)
Shovel
Capacity
(cubic
meters)
Horse-
power
Weight
(metric
tons)
Type of
Tracking
E-2513
7,100
0.25
40
8
C
E-4010
21,600
0.4
75
18.4
R
E-2515
6,000
0.25
48
5.1
R
E-5015
18,000
0.5
75
11.2
C
E-10011A
19,790
1
108
36.5
C
1973
E-153
5,480
0.15
48
5.3
R
E-302B
9,700
0.4
48
11.7
R
E-303B
10,200
0.4
48
11.6
C
E-304B
8,960
0.4
48
12.3
C
E-304V
10,200
0.4
48
13.5
C
E-652B
13,505
0.65
108
21.25
C
E-1251B
16,300
1.25
122
40.6
C
E-1252B
18,600
1.25
130
41
C
E-2503
45,690
2.5
218
94
C
E-4010
21,100
0.4
75
18.4
R
E-5015
18,000
0.5
75
11.25
C
TE-3M
10,500
0.5
48
20
C
E-1011AS
20,300
1
75
35
C
E-2505
54,500
2.5
218
94
C
EP-1
23,400
1
75
35.6
C
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0 --
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model
Price
(rubles)
Size of
the Blade "
(square meters)
Horsepower
Weight
(metric tons)
With/
Without
Elevator
Control
Mechanism z
Self-Propelled (S)
Towed (T)
D-205
1,050
1.869
4.26
w/o
M
T
D-20BM
1,316
1.826
3.8
w/o
M
T
D-144
9,700
1.998
100
13.7
w/o
M
S
D-241
800
1.5
2.8
w/o
M
T
D-395
27,500
2.59
150
18.2
w/o
M
S
D-437
6,100
...
...
2.8
w
H
T
D-446B
5,016
1.52
65
7.8
w/o
H
S
D-192A
4,750
54
9.75
w
M
T
D-265
6,000
1.50
54
8.5
w/o
M
S
D-426
9,500
2.174
110
9.2
w/o
H
S
B-10
4,700
75
9.3
w
H
S
D-241M
1,075
1.529
...
2.76
w/o
M
T
D-20B
1,050
1.869
4.26
w/o
M
T
D-144
9,700
1.998
100
13.4
w/o
M
S
D-241
800
1.5
2.8
w/o
M
T
D-395
30,000
2.59
150
17.4
w/o
H
S
D-437
6,970
...
...
8.2
w
H
T
D-446
6,000
1.52
65
7.8
w/o
H
S
D-512
5,000
2.169
75
9.0
w/o
H
S
D-192A
4,750
...
...
9.75
w
M
T
D-265
6,100
1.50
54
8.5
w/o
M
S
D-426
9,700
2.174
110
9.2
w/o
H
S
B-10
5,000
54
10.1
w
H
S
D-473
34,000
3.825
300
20.0
w/o
H
S
D-20BM
1,150
1.85
4.0
w/o
M
T
D-144
7,000
1.998
100
12.935
w/o
M
S
D-241
950
1.5
3.075
w/o
M
T
D-395
25,500
2.597
150
17.6
w/o
H
S
D-437A
6,050
8.3
w
H
T
D-446B
5,050
1.52
75
7.8
w/o
H
S
D-512
5,700
2.181
75
9.25
w/o
H
S
D-598
5,400
1.52
75
7.8
w/o
H
S
-- Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Graders (continued)
Model
Price
(rubles)
Size of
the Blade'
(square meters)
Horsepower
Weight
(metric tons)
With/
Without
Elevator
Control
Mechanism'
Self-Propelled (S)
Towed (T)
D-20BM
1,190
1.826
108
4.26
w/o
M
T
D-144A
11,300
1.998
108
12.7
w/o
M
S
D-241
820
1.529
2.8
w/o
M
T
D-395A
35,000
2.59
165
18.27
w/o
H
S
D-395AS
35,300
2.59
165
18.27
w/o
M
S
D-437A
6,720
108
8.16
w
H
T
D-710A
7,950
1.520
90
8.7
w/o
H
S
D-598
6,073
1.520
75
7.7
w/o
H
S
D-598A
6,156
1.520
60
8.6
w/o
H
S
D-598B
6,150
1.520
75
8.25
w/o
H
S
D-557
13,500
2.091
110
12.34
w/o
H
S
D-557A
11,000
2.072
108
12.1
w/o
H
S
D-616
20,650
12.60
w
H
T
D-633
71,000
33.20
w
H
S
D-5575
14,800
2.072
110
12.34
w/o
H
S
D-20BM
1,520
1.826
3.86
w/o
M
T
D-241A
1,240
1.529
2.76
w/o
M
T
D-710A
9,000
1.52
90
8.7
w/o
H
S
D-598
6,180
1.52
75
7.7
w/o
H
S
D-598A
6,540
1.52
90
8.6
w/o
H
S
D-557-1
14,300
2.091
108
12.8
w/o
H
S
' Length times height.
'M = mechanical; H = hydraulic.
' ... indicates data not applicable to this model.
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Model
Price
(rubles)
Shovel
Capacity
(cubic meters)
Horsepower
Weight
(metric tons)
Width of
the Blade
(meters)
Control
Mechanism` ?
Self-Propelled (S)
Towed (T)
D-213A
27,000
10
140
9.0
2.830
C
T
D-222
5,660
6.5
100
6.6
2.59
C
T
D-354
2,750
2.75
54
2.4
1.90
H
T
D-357G
18,810
9
165
8.6
2.78
H
S
D-374
5,900
8.0
100
6.5
2.59
C
T
D-392
35,615
15
375
14
2.85
H
S
D-458
2,750
2.75
54
2.2
1.90
H
T
D-498
8,400
6
100
7.3
2.765
H
T
D-511
46,200
15
300
16.28
2.90
H
?T
D-541
3,580
3
75
2.28
1.90
H
T
D-373
3,505
2.75
54
10.50
1.90
H
T
D-188A
46,200
15
300
15.75
3.10
C
T
D-222
5,660
6.5
100
6.6
2.59
C
T
D-222A
5,960
6.0
100
6.6
2.59
C
T
D-183B
2,730
2.25
54
2.42
1.65
H
T
D-230
2,515
2.25
54
1.82
1.65
H
T
D-147
5,675
6.0
93
6.0
2.59
C
T
D-468
11,935
4.5
110
6.2
2.60
H
S
D-461
2,890
2.75
54
2.5
1.90
H
T
D-213A
18,800
10
100
9.5
2.82
C
T
D-357M
18,000
9
180
10
2.72
H
S
D-374
5,820
8
100
6.5
2.592
C
T
D-374A
6,500
8
100
6.6
2.672
C
T
D-458
2,800
2.75
54
2.3
1.90
H
T
D-511
59,800
15
300
16.28
2.85
H
T
D-541
3,520
3
75
2.29
1.90
H
T
D-569
3,500
3
75
2.78
2.10
H
T
D-523
23,000
10
140
8.0
2.80
H
T
D-213A
24,160
10
180
9.6
2.82
C
T
D-374B
8,620
8
108
6.7
2.67
C
T
D-392
66,900
15
375
14
2.85
H
S
D-458
4,010
2.75
54
2.38
1.90
H
T
D-498
10,490
7
108
7.3
2.65
H
T
D-511
62,400
15
300
16.5
2.85
H
T
D-541
4,510
3
75
2.29
1.90
H
T
D-541A
4,430
3
75
2.385
1.70
H
T
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Scrapers (continued)
Model
Price
(rubles)
Shovel
Capacity
(cubic meters)
Horsepower
Weight
(metric tons)
Width of
the Blade
(meters)
Control
Mechanism'
Self-Propelled (S)
Towed (T)
D-213A
24,160
10
180
9.6
2.82
C
T
D-357G
17,970
9
180
17.1
2.78
H
S
D-374
8,620
8
100
6.5
2.59
C
T
D-374B
8,620
8
108
6.5
2.59
C
T
D-392
66,900
15
360
14
2.15
H
S
D-458
4,010
2.75
54
2.38
1.90
H
T
D-498
10,490
6
108
7
2.60
H
T
D-511
62,400
15
300
16.5
2.85
H
T
D-541
4,510
3
75
2.28
1.90
H
T
D-541 A
4,300
3
75
2.39
1.90
H
T
D-569
5,140
3
75
2.75
2.10
H
T
D-213A
22,440
10
140
9.5
2.82
C
T
D-354
4,300
2.75
54
2.4
1.90
H
T
D-374A
8,550
6
100
7.3
2.67
C
T
D-374B
8,550
8
108
6.7
2.65
C
T
D-392
57,000
15
375
16.55
2.85
H
S
D-498
9,900
7
108
7.0
2.65
H
T
D-511
58,040
15
271
16.5
2.85
H
T
D-541 A
4,850
3
74
2.39
2.15
H
T
D-569
5,600
3
74
2.75
2.10
H
T
Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Appendix B
Use of Principal Components
A high degree of correlation among independent
variables in a regression equation-that is, multi-
collinearity-causes instability in the estimates of the
standard errors of the regression coefficients.' In
matrix terminology, the diagonal elements of the
(X'X) -' matrix get very large. Since, the diagonal
elements multiplied by a constant are, by definition,
the estimates of the variances of the regression
coefficients of the independent variables, it is precisely
these variances which increase. Since the test of the
significance of an explanatory variable in the model-
the t test-is an inverse function of the square root of
its variance,' multicollinearity may cause the model
builder to drop a variable from the equation which
should, in theory, be retained. In other words,
multicollinearity may cause imprecision in the estima-
tion process and lead to model misspecification.
In those instances in the study where multicollinearity
was a problem, an estimating technique known as
principal components regression analysis was used.
The use of principal components in a single-equation
model is a special form of factor analysis-a technique
for examining relationships between variables in a set.
Factor analysis creates artificial variables, which are
combinations of the original variables in the data set.
Principal components factor analysis is one method of
obtaining or creating these artificial variables. The
variables are created by using the eigenvectors of the
According to Klein, "multicollinearity is not necessarily a problem
unless it is high relative to the overall degree of multiple correla-
tion." That is:
rid > Ry r,1 = correlation between two independent
variables.
Ry = multiple correlations between dependent and
independent variables.
See L. R. Klein, An Introduction to Econometrics (Englewood
Cliffs, N. J.: Prentice-Hall, 1962), p. 101.
(VAR /ii)'.
correlation matrix of the original variables as weights.
The original linear model can then be rewritten in
terms of the principal components and reestimated.
Finally, estimates of the regression coefficients in
terms of the original variables can be obtained through
a retransformation of the coefficients obtained using
principal components. Using matrix notation, this
procedure can be expressed in mathematical terms as
follows:'
Y = XB + ? (original model in matrix
notation)
X = matrix of original independent
variables
W = matrix whose columns are the nor-
malized eigenvectors
Z = XW (principal components (2)
matrix)
Y = ZW B + u, where X = ZW (from
term 1)
Set A = W'B
(3)
Y = ZA + s(original model transformed (4)
using principal components
to be estimated by ordinary
least squares)
B = WA (transformation of A to
ordinary least squares estimate
of B)
' For a complete derivation of the principal components of a
(5)
matrix X, see T. W. Anderson, An Introduction to Multivariate
Statistical Analysis (New York: Wiley, 1958).
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Appendix C
Estimating the Change in Wage and
Material Costs, By Branch of
Machine Building
An estimate of the change in wage and material costs
by branch of the machine-building and metalworking
sector was obtained using data contained in the
reconstructed 1966 Soviet input-output table in pro-
ducers prices. Very briefly, for each MBMW branch
the major material inputs were identified in the I/O
tables. Each input was expressed as a percentage of the
total material purchases (less taxes on material pur-
chases) of that sector. This weight was multiplied by
the change in price of the corresponding input over the
1966-70 period. Estimates of price changes effected in
the 1966-70 period were those decreed by the Price
Office of GOSPLAN, found in Studies in Soviet
Input-Output Analysis.'
Material inputs from other MBMW branches make up
a significant portion of total material purchases.
Hence, for the exercise to be meaningful, they had to
be included. Therefore, intra-MBMW material pur-
chases were aggregated into a single category and
moved forward to 1970 using Mitrofanova's price
index of machinery and equipment.' No change was
assumed in the price of the remaining material
purchases not accounted for-usually 20 percent or
less. The total change in material costs over the
1966-70 period was calculated by summing the
weighted individual input price changes. This estimate
of the change in material costs for each sector was then
multiplied by the weight of total material purchases
(less taxes on material purchases) to total sector
outlays (less tax on material purchases). These figures
are shown in column 7 of table C-1.
' V. G. Treml and G. D. Guill, "Conversions of the 1966 Producers'
Price Input-Output Table to a New Price Base," in Studies in Soviet
Input-Output Analysis ed. by V. G. Treml (New York: Praeger
Publishers, 1977), pp. 197-28 1.
2 See the section "Conflicting Claims Regarding Inflation in
Machinery Prices," pp. 1-5, above.
The change in wage costs were accounted for by
assuming that the average wage in MBMW was
applicable to each branch. In reality Soviet sources
indicate that wage differentials between MBMW
branches are as high as 19 percent. Unfortunately,
wage data for individual MBMW branches are not
available. Therefore, the change in the average wage
for overall machine building was used and multiplied
by each sector's total wage bill as a percent of total
outlays. The results are shown in column 9 of table
C-1.
Finally, the portion of total outlays other than material
purchases and wages was calculated (column 10). It
was assumed that such costs remained constant over
the period since information on MBMW industry
profits and on other cost items included in the other net
income line of the I/O tables is not available. The total
change in costs by industry of MBMW was obtained
by summing the change in material, wage, and other
costs (column 11).
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 O
O b
331
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o
0
- c
m y r
o _
'IT
v
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Appendix D
Estimating the Change in
Production Costs Per Unit
of Output Produced, By
Branch of Machine Building
Appendix C presents the methodology, data sources,
and calculations for estimating the change in total
production costs by machinery branch. This appendix
presents the same information for calculating produc-
tion costs on a per unit of real output basis.
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 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Unit Cost Analysis of Seven Soviet
Machine-Building Branches
Wages [1] Material Total' Value of Output [2]
(thousand rubles) Purchases [1] Purchases (thousand
(thousand rubles) (thousand rubles) 1970 rubles)
(4) (5) (6) (7) (8)
(1)+(2) (2)+(4)
840,945 1,030,881 1,162,945 1,512,886 1,325,894
3,895,847 3,456,539 5,148,847. 4,633,262 5,196,720
1,384,660 1,268,354 1,924,660 2,669,386 3,072,201
1966 1972 1966 1972 1966 1972 1966 1972
Energy and Power M&E 303,908 322,000 726,973
Electrotechnical M&E 843,224 1,253,000 2,613,315
Mining and metallurgy 498,292 540,000 770,062
M&E
Hoisting and Transport- 115,787 174,000 456,769 802,598 572,556 976,598 829,284 1,274,775
ingM&E'
Construction M&E' 132,145 198,000 561,570
Transportation M&E 534,459 804,000 2,243,270
Automobiles' 691,142 1,248,000 2,819,462
Sources:
1. US Department of Commerce, The Reconstructed 1966 Soviet
Input-Output Table: Revised Purchasers' and Producers' Price
Tables, Foreign Economic Report no. 13, September 1967; and The
Reconstructed 1972 Soviet Input-Output Table in Producers'
Prices, May 1979, unpublished.
2. CIA, Office of Economic Research, Soviet industrial production
data.
1,025,393 693,715 1,223,393 944,685 1,326,888
3,176,890 2,777,729 3,980,890 3,921,719 6,052,894
5,904,519 3,510,604 7,152,519 4,283,113 9,305,564
'This industry was analyzed in this paper.
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 Approved For Release 2008/09/15: CIA-RDP08SO135OR000100150001-0
Total
Unit
Unit
Employment [1]
Labor
Unit Costs
Labor Costs
Material Costs
(thousand
man-years)
Productivity
Rubles per
Man-Year
1966
1972
1966
1972
1966
1972
1966
1972
1966
1972
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(5)-(7)
(6)-(8)
(1)-(7)
(2)-(8)
(3)-(7)
(4)-(8)
7 -(15)
(8) . (16)
0.681
0.877
0.201
0.243
0.481
0.634
237.8
176.3
6,372
7,521
0.746
0.991
0.182
0.241
0.564
0.750
659.8
755.8
6,876
0.475
0.626
0.187
0.176
0.288
0.451
389.9
249.6
6,846
12,308
0.734
0.922
0.140
0.149
0.594
0.773
103.4
114.9
9,136
11,548
0.708
0.658
0.136
0.133
0.572
0.525
418.2
442.0
9,378
13,694
0.820
0.769
0.161
0.134
0.658
0.635
540.8
722.1
7,920
12,887
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