Tuesday, February 15, 2011

What is the Economic Cost of Closing a Post Office?

The Center for the Study of the Postal Market has just posted in the Postal Journal the first study looking at this question.  The study was conducted by a team of six graduate students as part of a Cost Benefit class at the LaFollette School of Public Affairs at the University of Wisconsin-Madison.    The study examined a hypothetical situation, the impact of closing one Post Office in Marquette County Wisconsin.   This county is representative of some of the most rural counties in the United States with a population of less than 15,000 spread out over 455 sqare miles.

Last year the USPS - Office of Inspector General released a model that the students employed and determined that the Postal Service could justify on a business basis keeping only two of the seven Post Offices that now exist in the county.   The student's study looked at only closing one of the seven which was a more solvable problem within the time constraints of a course project

With the Postal Service about to close around 2,000 Post Offices and soon thereafter implementing a new retail strategy, this analysis should be of interest of anyone following changes in how the Postal Service offers retail services.   As a first attempt to look at this question, the analysis clearly has flaws, and as editor of the Postal Journal, I urge the readers of this blog to read the study and send me critiques and suggestions for further research that I can publish in the Postal Journal

For more details see the story in the Postal Journal.

Cost-Benefit Analysis Provides First Attempt to Measure Economic Impact of Closing a Rural Post Office

No comments: