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Cost Efficiency Measurement in Postal Delivery Networks

Author

Listed:
  • Massimo Filippini

    (Department of Economics, University of Lugano; ETH, Zurich, Switzerland)

  • Martin Koller

    (ETH, Zurich, Switzerland)

Abstract

The purpose of this study is to analyze the level of cost efficiency of Swiss Post's postal delivery units to enable policy makers' as well as Swiss Post to decide on the reactions to market changes. In particular, we use different panel data models to assess cost efficiency in these units to account for unobserved heterogeneity. The results from applying Mundlak's formulation to the Pooled stochastic frontier model provides evidence that this model is not affected by a heterogeneity bias and that the cost efficiency values lie within a lower and upper bound of the other recent and standard econometric frontier models. Overall, the analysis shows that assumptions on unobserved heterogeneity are crucial and that results of econometric cost efficiency measurement models have to be interpreted with corresponding caution.

Suggested Citation

  • Massimo Filippini & Martin Koller, 2012. "Cost Efficiency Measurement in Postal Delivery Networks," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1206, USI Università della Svizzera italiana.
    • Handle: RePEc:lug:wpaper:1206
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    References listed on IDEAS

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    More about this item

    Keywords

    cost efficiency; stochastic frontier models; unobserved heterogeneity; Mundlak; postal delivery network;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services

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