Cost-Benefit Analysis Of Rural Post Office Branches

01 June 2003
By Michael Spackman with former NERA Senior Consultant Leela Barham and former NERA Director John Dodgson

This report, completed in June 2003 but released to the public in November 2004, was produced by NERA for the Postal Services Commission, the independent postal regulator in the UK. The key objectives of the study were to quantify the value of Post Office branches and services to local rural communities and quantify the cost of delivering these services.

In conjunction with RAND Europe, NERA used a choice modelling methodology to estimate the benefits that households receive from a local Post Office. Face-to-face surveys were conducted in ten rural regions and quotas were used to ensure representation of vulnerable members of society, including the disabled, pensioners and those in Social and Economic Group (SEG). The survey also covered small businesses.

NERA compared the total costs with revenue and benefits to households across deciles of rural Post Offices and found that almost all rural branches cost more to run than the revenue they produce, and that relatively few branches are profitable. However, social benefits exceed costs for 80 percent of branches. Click on the link below to learn more about NERA's additional findings and recommendations.