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Competition and Regulation in the Postal and Delivery Sector

Competition and Regulation in the Postal and Delivery Sector

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

orldwide, postal and delivery economics has attracted considerable interest. Numerous questions have arisen, including the role of regulation, funding the Universal Service Obligation, postal reform in Europe, Asia and North America, the future of national postal operators, demand and pricing strategies, and the principles that should govern the introduction of competition. Collected here are responses to these questions in the form of 24 essays written by researchers, practitioners, and senior managers from throughout the world.

Chapter 6: The Impact of Economic and Demographic Dispersion on Aggregate Mail Volumes

Luis Jimenez, Matthew C. Harding and Michael Lintell

Subjects: economics and finance, public sector economics


* Luis Jimenez, Matthew C. Harding and Michael Lintell 1. INTRODUCTION Mail demand is an important object of study in the economics of regulated industries. While some of the main drivers of aggregate mail demand (e.g., GDP) are well understood, the relationship between the mail drivers of demand across mail streams disaggregated by sender–receiver pair is often poorly predicted by macroeconomic aggregates. The aim of this chapter is to analyze the extent to which the dispersion in some of the drivers of mail demand can be used to explain variation in mail demand across time and across countries. This research is the third contribution to the series on aggregate mail demand across countries. Harding (2005) provides a comprehensive review of the econometric and qualitative models developed over the past 30 years and notes that so far no econometric model of mail demand has been constructed that takes advantage of combining multiple time series of mail volumes across countries. Although many useful and interesting time series models exist in the literature (e.g., Trinkner and Grossmann, 2006), they focus on explaining mail volumes in one country only. Given the limitations on the availability of past data and the risk of structural breaks occurring if we investigate events that happened too many years into the past, time series based models find it difficult to investigate a large number of potential drivers. Harding (2006) tries to overcome this limitation by investigating the demand jointly across several developed economies. It constructs a unique dataset...

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