Tariff rebalancing in the UK postal market

Phil Burns presented a paper to the 11th Conference on Postal and Delivery Economics ("The distributional impact of tariff re-balancing", P. Burns, I. Carslake, J. Harvey and G. Houpis, Frontier Economics, London) examining the financial impact that tariff rebalancing might have on households following the liberalisation of the postal market. The paper develops a simple empirical model that indicates that any postal price increases to households following rebalancing will be partly offset by the "flowthrough effect" - businesses passing their postal cost savings back to households in the form of price reductions. The paper argues that distributional concerns as a result of liberalisation may be quite limited. To view the presentation slides, click here.