Estimation of Consumers’ Willingness-to-pay for Quality of Service in Post
While Postal liberalisation is underway in the EU, much of the postal market remains regulated. Regulation takes the form of both price and entry protection. Entry protection is believed to be necessary for incumbent universal service providers (USPs) who face significant burdens from un-sustainable cross subsidies1. With both price and entry set exogenously by the regulator, quality of service naturally becomes an issue. Regulators are thus properly concerned about quality of service. At the same time, facing increasing competition from various forms of communication, Posts are also looking at quality of service from a commercial perspective. In fact, at recent international conferences on postal economics and universal service, speakers2,3 have given quality of service a prominent position in discussions about the future of the postal service. Many posts are under pressure from falling volumes and enhanced potential for electronic substitution. Quality of service improvement is seen as one way of stemming this tide.
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