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Special Post Office, Privatization and Universal Service Obligation Costs

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  • Fumitoshi Mizutani

    (Graduate School of Business Administration, Kobe University)

  • Shuji Uranishi

    (Fukuyama Heisei University Faculty of Business Administration)

Abstract

By using the empirical method, this paper analyzes Japan' s ``special" post office and evaluates universal service obligation (USO) costs. With empirical analysis, we obtained the following results. First, the cost of the special post office is about 9.8% higher than that of the ``ordinal" post office. Second, USO costs are about 348 billion yen, accounting for 17.3% of total revenues generated by ordinal postal services. Also, approximately 81% of total prefectures are creating deficits. Third, if the special post office were abolished, USO costs would be reduced to 273 billion yen. Last, even with the privatization of the Japan Post, USO costs are still large at 251 billion yen. These results imply that reorganization of the post office network will be necessary.

Suggested Citation

  • Fumitoshi Mizutani & Shuji Uranishi, 2006. "Special Post Office, Privatization and Universal Service Obligation Costs," Discussion Papers 2006-05, Kobe University, Graduate School of Business Administration.
    • Handle: RePEc:kbb:dpaper:2006-05
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    File URL: https://www.b.kobe-u.ac.jp/papers_files/2006_05.pdf
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    References listed on IDEAS

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    1. Rodriguez, Frank & Storer, David, 2000. "Alternative approaches to estimating the cost of the USO in posts," Information Economics and Policy, Elsevier, vol. 12(3), pages 285-299, September.
    2. Mizutani, Fumitoshi & Uranishi, Shuji, 2003. "The Post Office vs. Parcel Delivery Companies: Competition Effects on Costs and Productivity," Journal of Regulatory Economics, Springer, vol. 23(3), pages 299-319, May.
    3. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
    4. Bishop, Matthew R. & Kay, John A., 1989. "Privatization in the United Kingdom: Lessons from experience," World Development, Elsevier, vol. 17(5), pages 643-657, May.
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    Cited by:

    1. Fumitoshi Mizutani & Shuji Uranishi & Eri Nakamura, 2014. "Postal Services: Governments and Firms' Perspective," Discussion Papers 2014-38, Kobe University, Graduate School of Business Administration.

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