Calculating the Cost of the Universal Service Obligation: The Need for a Global Approach
AbstractThe paper presents the basic approaches to calculate the cost of the USO and compares them with the requirements of the 3rd postal directive. We conclude that the profitability cost approach will lead to consistent estimations if it is applied in a global way. We illustrate our findings with an econometric estimation of the net costs of Swiss Post’s obligation to provide a nationwide post office network for postal and financial services. We finally illustrate that the financing mechanism in place must be considered as well as there are important drawbacks on the cost of the USO.
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Bibliographic InfoPaper provided by Swiss Economics in its series Working Papers with number 0010.
Length: 17 pages
Date of creation: May 2008
Date of revision: Jul 2008
Publication status: Published in Progress in the Competitive Agenda in the Postal and Delivery Sector, edited by Crew, M A; Kleindorfer, P R., Cheltenham, 113-127
USO; net costs; cost of the universal service obligation; financing; Post Office Network; Global Approach;
Find related papers by JEL classification:
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- Christian Jaag, 2007.
"Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations,"
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- Christian Jaag, 2010. "Compensating the Net Cost of Universal Postal Services," Working Papers 0017, Swiss Economics.
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