Table of Contents

Reinventing the Postal Sector in an Electronic Age

Reinventing the Postal Sector in an Electronic Age

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

This compilation of original essays by an international cast of economists, regulators and industry practitioners analyzes some of the major issues now facing postal and delivery services throughout the world as competition from information and communication technologies has increased.

Chapter 3: Does the Level of Price Elasticity Change with the Progression of Substitution?

Heikki Nikali

Subjects: economics and finance, public sector economics


Heikki Nikali† INTRODUCTION 1 The erosion of paper mail demand by electronic substitution is a reality in all developed countries. Almost nobody is prepared to deny this anymore. It is also evident that the substitution process has reached different stages in different countries, and a good example would be a comparison between Denmark and Finland. Denmark belongs to the first wave of consumer invoice digitization, whereas Finland is a long way behind. Two years ago only one-third of Danes said that paper letters were their main channel for receiving invoices (Kiikkilä et al., 2008). In Finland the proportion was nearly 90 percent. The corresponding figures for Denmark are 32 percent and for Finland 83 percent in 2010 (Elkelä 2010). During the 2000–09 period, addressed letter volumes decreased by 29 percent in Denmark and 9 percent in Finland. The main purpose of this chapter is to examine the case of Finland and to determine whether letter price elasticity in different sender and receiver categories varies according to the extent of electronic substitution. Although the substitution process has progressed farthest for letters sent by consumers, it has only just begun in the business-to-consumer (B2C) sector (Nikali, 2008). Consumers send messages to each other and have many channels at their disposal (letter, postcard, email, short message service (SMS), and many new Internet communication forms). However, in B2C communication senders have to be careful even when using email or SMS, and at present they cannot easily use the new Internet communication forms. For...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information