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A cross-country study of the cost efficiency of the postal sector

Gori, Stefano

Authors

Stefano Gori



Abstract

This thesis is an original and innovative contribution to the debate on the efficiency assessment of the mail business, which is the core business of postal operators. Postal services are an important economic sector for two reasons. First, due to the labour-intensive nature of their work, postal operators are often among a country’s top two employers. Secondly, because of the nature of their business, which is connecting domestically and internationally people, companies and governments, they contribute significantly to economic and social cohesion.
The efficiency of postal operators is important in light of the European Commission’s recent focus on state aid in this sector. In a 2012 decision it criticised previous methods of assessing cost efficiency, specifically the two pillars of cost analysis used in the past decade: NERA, 2004, and Cohen et al., 2002. It suggested the development of a more robust and comprehensive methodology.
This thesis aims to provide a robust method for assessing this efficiency by building on earlier work to develop an original and comprehensive three-stage framework which could be applied in a hypothetical case in front of European Institutions. The three stages are: 1) assessment of the segment under analysis to comprehend the level of competition, 2) for the more competitive segment, the application of the survivor technique is suggested and 3 ) for the less competitive segment, the proposal is to apply the Principal Component Analysis to identify the determinants of demand, then utilise parametric, non-parametric and semi-parametric methods to analyse efficiency (ideally a two-stage DEA with Tobit with exogenous variables), and the Spearman technique to investigate ranks emerging from the analysis.
This method has potentially wide application. It is a useful tool for regulatory authorities, European Institutions and national courts and could be extended to other regulated industries with similar characteristics.

Thesis Type Thesis
APA6 Citation Gori, S. A cross-country study of the cost efficiency of the postal sector. (Thesis). University of the West of England
Keywords postal sector, cost efficiency, business


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