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A Demand System Approach to Affordability

In: Postal and Delivery Innovation in the Digital Economy

Author

Listed:
  • Gregory Swinand

    (London Economics)

  • Hugh Hennessy

    (London Economics)

  • Graeme O’Meara

    (London Economics)

Abstract

Postal Universal Service Providers and traditional mail carriers continue to face the dual challenge of falling demand and traditional regulation. Between 2007 and 2011, mail volumes fell by an average of 15 % across Europe, falling by 3.2 % per year in Ireland and 6.4 % per year in the UK (Niederprüm 2013). As certain services fall under the Universal Service Obligation (USO), Universal Service Providers (USPs) are obliged to continue to offer these services. In order to finance the USO, USPs often seek to increase prices on certain products. This has been the case in the postal sector; for example, An Post increased the tariff on letters up to 50 g by 5 cent in 2013, while Royal Mail increased the tariff on the same product by 2p to 3p in 2014. As USO products, these price changes must be approved by the regulator.

Suggested Citation

  • Gregory Swinand & Hugh Hennessy & Graeme O’Meara, 2015. "A Demand System Approach to Affordability," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Timothy J. Brennan (ed.), Postal and Delivery Innovation in the Digital Economy, edition 127, pages 115-129, Springer.
    • Handle: RePEc:spr:topchp:978-3-319-12874-0_9
    DOI: 10.1007/978-3-319-12874-0_9
    as

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