A Demand System Approach to Affordability
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Abstract
Postal Universal Service Providers and traditional mail carriers continue to face the dual challenge of falling demand and traditional regulation. Between 2007 and 2011, mail volumes fell by an average of 15 % across Europe, falling by 3.2 % per year in Ireland and 6.4 % per year in the UK (Niederprüm 2013). As certain services fall under the Universal Service Obligation (USO), Universal Service Providers (USPs) are obliged to continue to offer these services. In order to finance the USO, USPs often seek to increase prices on certain products. This has been the case in the postal sector; for example, An Post increased the tariff on letters up to 50 g by 5 cent in 2013, while Royal Mail increased the tariff on the same product by 2p to 3p in 2014. As USO products, these price changes must be approved by the regulator.
Keywords
Price Elasticity Budget Share Postal Product Expenditure Share Household Budget Survey
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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