Skip to main content

A Method to Assess the Impact of the Universal Postal Service Obligation

  • 44 Accesses

Part of the Topics in Regulatory Economics and Policy book series (TREP)

Abstract

The notion of unfairness of the financial burden resulting from the universal service obligation (‘USO’) finds its application in a number of contexts, among which the postal sector. Although the notion of the unfairness of the burden of the USO is embedded in the European postal regulatory framework since it was first introduced in 1997 by the first European postal directive, we observe a lack of a rigorous and robust methodology to assess unfairness by national regulators. Similarly, academic research on this subject matter has not yet developed a methodological framework to assess unfairness. Methodologies that rely exclusively on arbitrary thresholds based on ratios of revenues and costs of the USP, while easy to apply, are not supported by a clear economic rationale. This paper aims to fill the gap by developing a methodology to identify the difference in profitability between USPs that bear the USO and their comparators. We show that this method can be applied by means of a traditional non-parametric comparator approach, and by means of a regression analysis. We also describe how one can apply this profitability benchmarking approach to USPs that do not offer exclusively (or mainly) postal services, but operate across different sectors (e.g. financial services).

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-3-030-82692-5_16
  • Chapter length: 12 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   139.00
Price excludes VAT (USA)
  • ISBN: 978-3-030-82692-5
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Hardcover Book
USD   179.99
Price excludes VAT (USA)
Fig. 1

Notes

  1. 1.

    European Parliament and Council (1997, 2002).

  2. 2.

    European Parliament and Council (1997, 2002).

  3. 3.

    Court of Justice of the European Union (2010a, b).

  4. 4.

    Court of Justice of the European Union (2010a).

  5. 5.

    European Parliament and Council (2008)

  6. 6.

    AGCOM (2014), AGCOM (2017), AGCOM (2018), AGCOM (2019).

  7. 7.

    For example, Gautier A., Paolini, D. (2010).

  8. 8.

    See Ofcom (2011a), Ofcom (2011b), Ofcom (2012), Ofcom (2015) and Ofcom (2017).

  9. 9.

    In this analysis, the net cost of the USO is known from public sources, so it does not need to be calculated.

  10. 10.

    The underlying assumption here is that the other USPs used to estimate the regression are perfectly compensated for the USO. Notice that the sample of firms used in the regression may include both USPs and other firms that are not USPs.

References

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Luigi Stammati .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Verify currency and authenticity via CrossMark

Cite this chapter

Alimonti, R., Ippolito, F., Stammati, L. (2022). A Method to Assess the Impact of the Universal Postal Service Obligation. In: Parcu, P.L., Brennan, T.J., Glass, V. (eds) The Economics of the Postal and Delivery Sector. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-030-82692-5_16

Download citation