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TECHNICAL REPORT Study on Appropriate Methodologies to Better Measure Consumer Preferences for Postal Services Final Report Charlene Rohr • Urs Trinkner • Alison Lawrence • Priscillia Hunt Chong Woo Kim • Dimitris Potoglou • Rob Sheldon Prepared for Internal Market and Services DG MARKT/2010/14/E EUROPE The research described in this document was prepared for the Internal Market and Services DG MARKT/2010/14/E. RAND Europe is an independent, not-for-profit research organisation whose mission is to improve policy and decision making for the public good. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. © Copyright 2011 European Commission All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the European Commission. Published 2011 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 Westbrook Centre, Milton Road, Cambridge CB4 1YG, United Kingdom RAND URL: http://www.rand.org RAND Europe URL: http://www.rand.org/randeurope To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface RAND Europe, in conjunction with Accent and Swiss Economics, was commissioned by the European Commission Directorate-General Internal Market and Services to conduct research on appropriate methodologies to better measure consumer preferences for postal services. This report summarises work undertaken testing the use of stated preference discrete choice experiments to measure consumer preferences for postal services. It discusses the importance of understanding and quantifying consumer priorities in the postal sector and presents different methods used for valuing non-market goods. We recommend the use of stated preference discrete choice experiments, and test the use of this approach in three member states. We provide the findings for these member states, as well as a “tool kit” for applying this methodology in other member states in future. RAND Europe is an independent not-for-profit policy research organisation that aims to improve policy and decision making in the public interest, through research and analysis. RAND Europe’s clients include European governments, institutions, NGOs and firms with a need for rigorous, independent, multidisciplinary analysis. For more information about RAND Europe or this document, please contact Charlene Rohr at: RAND Europe Westbrook Centre Milton Road Cambridge CB4 1YG United Kingdom Tel. +44 (1223) 353 329 [email protected] iii Contents Preface ........................................................................................................................ iii Table of Figures ........................................................................................................... ix Table of Tables ............................................................................................................ xi List of Acronyms and Definitions ............................................................................... xv Country Abbreviations ............................................................................................. xvii Summary ................................................................................................................... xix Acknowledgements ................................................................................................ xxxix CHAPTER 1 The importance of understanding consumers’ preferences for postal services ................................................................................... 1 1.1 Structure of the report ....................................................................................... 2 CHAPTER 2 Our methodological framework for measuring consumers’ preferences for postal services ........................................................... 3 2.1 Valuing non-market goods and services ............................................................. 3 2.2 Understanding consumers’ priorities for postal services ...................................... 7 2.2.1 The role of postal services .................................................................... 7 2.2.2 Underlying needs of postal services from an economic perspective ........................................................................................... 8 2.2.3 Summary and remarks ....................................................................... 11 CHAPTER 3 Implementing the valuation methodology in three member states .............................................................................................. 13 3.1 Defining the attributes to be tested in the choice exercises ............................... 13 3.1.1 Implications of our analysis of the underlying needs of postal services ............................................................................................... 14 3.1.2 Review of attributes tested in other postal studies ............................... 16 3.1.3 Levels of USO across member states ................................................... 19 3.1.4 Views from stakeholders..................................................................... 20 3.1.5 Recommended attributes to be tested ................................................. 21 3.2 Treatment of altruism ..................................................................................... 27 3.3 The inclusion of an “as now” or baseline alternative ........................................ 27 3.4 Designing the choice experiments .................................................................... 28 3.5 Other information collected in the questionnaire ............................................ 32 3.6 Key market segments ....................................................................................... 33 v Study on Appropriate Methodologies to Better RAND Europe Measure Consumer Preferences for Postal Services Accent Swiss Economics 3.7 Recommended survey sample sizes ................................................................... 34 3.8 Survey methodology ........................................................................................ 36 3.9 Choosing the member states for testing the methodology ................................ 37 3.10 Pilot testing the questionnaire in the member states ......................................... 48 3.10.1 Cognitive testing ................................................................................ 48 3.10.2 Pilot surveys ....................................................................................... 49 3.11 Main surveys.................................................................................................... 51 3.11.1 Characteristics of the achieved sample ................................................ 51 3.12 Summary of key implementation issues ........................................................... 58 CHAPTER 4 Postal service preferences for customers in Italy, Poland and Sweden ........................................................................................... 59 4.1 Background findings ........................................................................................ 59 4.1.1 Mail sending and receipt .................................................................... 59 4.1.2 Paying for postage .............................................................................