Table of Contents

Reforming the Postal Sector in the Face of Electronic Competition

Reforming the Postal Sector in the Face of Electronic Competition

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

In our increasingly technology-focused world, demand for traditional postal services is steadily shrinking. This timely volume examines the many challenges that the worldwide postal sector is facing as a result of growing electronic competition, and offers expert recommendations for reshaping postal structures to strengthen their competitiveness in an electronic age.

Chapter 18: Efficiency analysis postal operators: comparison between the United States and Europe

Maria Rita Pierleoni and Stefano Gori

Subjects: economics and finance, public sector economics


This chapter benchmarks efficiency for panel data of five postal operators (La Poste, Deutsche Post, Royal Mail, Poste Italiane and US Postal Service: USPS). The analysis is based on the following parametric and nonparametric techniques: ordinary least squares fixed effects (OLSFE), random effects (RE), stochastic frontier analysis–maximum likelihood (SFA (ML)) and data envelopment analysis (DEA). The analysis of efficiency presented in this chapter is based on an approach proposed by Farrell (1957) and Fried et al. (2008). Two broad paradigms for measuring economic efficiency have emerged from the literature: one based on an econometric/parametric approach where through a regression, a statistically significant relationship between costs and the factors affecting costs is tested to obtain an estimate of theory-based models of cost. With this approach the researcher knows the parameters of the variable of interest in the population. The second is the nonparametric mathematical programming approach whose main method is DEA (Greene, 2008, p. 92). It makes no accommodation for noise and envelops the data (Fried et al., 2008, p. 45).

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