On Efficient Rate Design

Edward S. Pearsall ()
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Edward S. Pearsall: US Postal Regulatory Commission

A chapter in Postal Strategies, 2023, pp 269-282 from Springer

Abstract: Abstract The paper employs a form of algebra for treating certain linear integral equations to derive results that apply to the problem of designing efficient rates when demand and cost are continuous functions of a single hedonic property such as weight per piece. An efficient rate design for a category of mail yields a prescribed contribution to cover non-variable costs with the least sacrifice in social welfare. The paper applies algebra to derive two simple principles for calculating efficient rates and demand volumes as continuous functions of the hedonic property. The paper includes a worked-out example applying the principles to derive a function relating efficient rates to weight per piece for single-piece bound printed matter mail.

Keywords: Efficient rates; Hedonic price equation; Rate design; Linear integral equations; Ramsey pricing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:topchp:978-3-031-25362-1_20

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DOI: 10.1007/978-3-031-25362-1_20

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