We study the pricing and welfare implications of changing the VAT status of the national postal operator (NPO) from exempt to rated. We build a model where the NPO offers both single-piece and bulk mail to customers, some of them VAT rated, others VAT exempt. We solve for the optimal Ramsey prices under monopoly and under access-based competition for bulk mail. We finally perform numerical simulations in order to determine how prices, volumes and welfare might be affected by the change in the NPO’s VAT status, both under monopoly and under access-based competition for bulk mail.
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On the Value Added Taxation Status of National Postal Operators
Philippe De Donder / Helmuth Cremer / Paul Dudley / Frank Rodriguez
1Toulouse School of Economics (GREMAQ-CNRS and IDEI), dedonder@cict.fr
1Toulouse School of Economics (GREMAQ, IDEI and Institut universitaire de France)
1Royal Mail Group
1Royal Mail Group
Citation Information: Review of Network Economics. Volume 8, Issue 3, Pages –, ISSN (Online) 1446-9022, DOI: 10.2202/1446-9022.1178, September 2009
Publication History:
- Published Online:
- 2009-09-01
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