An Empirical Study on the Direction of Restructuring the Postal Service in Korea using Choice Experiment

Abstract

The postal services provides under the USO (universal service obligation), which allows people to access a basic package of services at reasonable uniform prices and a minimum level of quality. However, since the demand of the services has declined, the needs of the restructing of the services has emerged. In this regards, this study involved conducting a survey about public attitudes, and estimated the public’s willingness to pay to maintain the current level of USO of Korea’s postal service. According to survey results, Korean people are willing to pay KRW 477.55 (USD 0.43) to maintain the current level of postal service. More specifically, the mean marginal WTP (willingness to pay) for increasing the number of post offices and delivery frequency are estimated at KRW 8.65 and KRW 31.88 respectively. However, increasing the number of post offices did not substantially influence public preference. Additionally, according to the results with the covariate, living in a city in Korea influenced the public’s utility of the postal service.