Productivity at the Post: its Drivers and its Distribution

Abstract

We study the economic, financial and distributional performance of the United States Postal Service subsequent to its 1971 reorganization. We investigate the economic sources of productivity change, (technical change, change in cost efficiency, and scale economies), and the distribution of the financial benefits of productivity change (consumers of postal services, postal employees and other resource suppliers, and residual claimants). We find improvements in technology to have been the main driver of, and diseconomies of scale to have been the main drag on, productivity change. We find labor to have been the main beneficiary, and the US Treasury and consumers of postal services the main losers, from postal reorganization.
Published as: Boundedly rational expected utility theory in Journal of Risk and Uncertainty , Vol. 57, No. 3, 199-223, December, 2018