The economics of postal services : theory and practice

Jones, Adrian. (1994). The economics of postal services : theory and practice Honours Thesis, School of Economics, University of Queensland.

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Author Jones, Adrian.
Thesis Title The economics of postal services : theory and practice
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1994
Thesis type Honours Thesis
Total pages 96
Language eng
Subjects 14 Economics
Formatted abstract
The case for liberalising entry into those services not reserved to Australia Post is examined in this study. In addition the case for the adoption of the multi-tiered postal pricing is also examined. Historical experience suggests that postal services are not a natural monopoly, that it is possible to ha\le a competitive letter market and have competitors interconnect with one another. The objective of uniform pricing would appear to be the provision a letter service in rural and remote areas below the cost of providing those services. The economic characteristics of postal services have not been clearly determined because of a lack of appropriate cost data. Much of the analysis of postal services to date does not consider the definition of a natural monopoly in the context of a multiproduct enterprise. There is thus scope for a review of the economic characteristics of postal services. Postal services are facing increasing competition from new electronic forms of communication. This indicates the significance of letters as a form of communication is declining. Analysis of the demand for standard letters in Australia indicates that it is inelastic, that standard letters are not an inferior good and that the telephone is not a perfect substitute for standard letters. The transaction costs of multi-tiered pricing for standard letters would appear to outweigh the efficiency gains of multi-tiered pricing for standard letters. The data provided by Australia Post does not allow one to estimate whether postal services constitute a natural monopoly. There would appear to be economies of scope associated with the joint production of postal articles and counter and agency services. All the evidence currently available suggests that postal services are not a natural monopoly, and irrespective of this, there would appear to be potential welfare gains from liberalising entry.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
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Created: Wed, 24 Nov 2010, 11:10:57 EST by Muhammad Noman Ali on behalf of The University of Queensland Library