Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations
AbstractWe discuss the ongoing liberalization process in the market for addressed letter mail in Switzerland. The core of the paper is an assessment of the liberalization’s impact on the financial viability of various universal service obligations with and without access to the incumbent’s downstream delivery network for customers and competitors. We propose a simple calibrated model of the Swiss letter market offering theoretical insights into the mechanics of market opening along with quantitative conclusions bearing direct policy relevance. The extent of the entrants’ market coverage and the equilibrium in the resulting price competition are endogenously determined. Our simulations suggest caution in introducing full market opening. For the scenarios considered, the model shows that either the burden of the uso must be reduced (e.g. with respect to the frequency and the coverage of delivery and / or through price differentiation). Alternatively, other means of assuring financial stability of Swiss Post must be sought, be it through external funds or demand stimulation through new products, possibly in the worksharing domain.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Swiss Economics in its series Working Papers with number 0006.
Date of creation: Feb 2007
Date of revision:
Publication status: Published in Swiss Journal of Economics and Statistics 143(3), 261-282.
post; universal service obligation; full market opening; liberalization; mail;
Other versions of this item:
- Christian Jaag, 2007. "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(III), pages 261-282, September.
- Jaag, Christian, 2007. "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations," MPRA Paper 6121, University Library of Munich, Germany.
- H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Helmut M. Dietl & Urs Trinkner & Reto Bleisch, 2004. "Liberalization and Regulation of the Swiss Letter Market," Working Papers 0001, Swiss Economics, revised Jul 2005.
- Valletti, Tommaso M & Hoernig, Steffen & Barros, Pedro P, 2002.
"Universal Service and Entry: The Role of Uniform Pricing and Coverage Constraints,"
Journal of Regulatory Economics,
Springer, vol. 21(2), pages 169-90, March.
- Hoernig, Steffen & Pita Barros, Pedro Luis & Valletti, Tommaso, 2001. "Universal Service and Entry: the Role of Uniform Pricing and Coverage Constraints," CEPR Discussion Papers 2789, C.E.P.R. Discussion Papers.
- Beat Friedli & Christian Jaag & Daniel Kraehenbuehl & Ole Bach Nielsen & Søren-Michael Pihl & Urs Trinkner, 2006. "Consumer preferences and last mile pricing in the postal sector," Working Papers 0004, Swiss Economics, revised Jul 2006.
- Martin Maegli & Christian Jaag & Matthias Finger, 2009.
"Coûts de la régulation des industries de réseau: enseignements du réseau postal,"
0015, Swiss Economics.
- Martin Maegli & Christian Jaag & Matthias Finger, 2009. "Coûts de la régulation des industries de réseaux : enseignements du réseau postal," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 47-68.
- Martin Maegli & Christian Jaag & Matthias Finger, 2010.
"Regulatory Governance Costs in Network Industries: Observations in Postal Regulation,"
0018, Swiss Economics.
- M. Maegli & C. Jaag & M. Finger, 2010. "Regulatory Governance Costs in Network Industries: Observations in Postal Regulation," Competition and Regulation in Network Industries, Intersentia, vol. 11(2), pages 207-238, June.
- Helmut M. Dietl & Urs Trinkner, 2008. "Developing Universal Postal Services in Latin America – an Economic Perspective," Working Papers 0012, Swiss Economics, revised Nov 2008.
- Martin Buser & Christian Jaag & Urs Trinkner, 2007. "Economics of Post Office Networks: Strategic Issues and the Impact on Mail Demand," Working Papers 0008, Swiss Economics, revised Dec 2007.
- Christian Jaag & Helmut Dietl & Urs Trinkner & Oliver Fürst, 2011. "Defending Mail Markets against New Entrants: An Application of the Defender Model," Working Papers 0027, Swiss Economics.
- Christian Jaag, 2013.
"Price Regulation and the Financing of Universal Services in Network Industries,"
0039, Swiss Economics.
- Jaag Christian, 2013. "Price Regulation and the Financing of Universal Services in Network Industries," Review of Law & Economics, De Gruyter, vol. 9(1), pages 125-150, September.
- Christian Jaag & Martin Koller & Urs Trinkner, 2008. "Calculating the Cost of the Universal Service Obligation: The Need for a Global Approach," Working Papers 0010, Swiss Economics, revised Jul 2008.
- Helmut Dietl & Christian Jaag & Markus Lang & Urs Trinkner, 2010.
"Competition and Welfare Effects of VAT Exemptions,"
0024, Swiss Economics, revised Oct 2010.
- Maegli, Martin & Jaag, Christian, 2009. "Regulatory Governance Costs in Network Industries: Implicatins for postal Regulation," MPRA Paper 15309, University Library of Munich, Germany.
- Christian Jaag & Urs Trinkner, 2007. "Pricing in competitive two-sided mail markets," Working Papers 0007, Swiss Economics, revised Jul 2007.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Jaag).
If references are entirely missing, you can add them using this form.