The information on US prices used in this study was obtained through a questionnaire sent to the members of the European Regulators Group for Postal Services (ERGP), and in some cases it was supplemented by consulting the websites of Member States’ USPs. Information was collected on the prices in force at the beginning of April 2014 and 2015 in the various Member States1. This was supplemented with information from previous tariff studies published by ANACOM, for the years 2008 to 2011, so as to gain an insight into the trend over a longer timeframe.
It should be noted that while the information on 2014 and 2015 concerns the prices in force at the beginning of April, the information available in the studies from 2008 to 2011 relates to October. Therefore, when comparing the 2008 and 2015 tariffs, we are looking at an interval of six and a half years. Given the broad timeframe, the cumulative growth from October 2008 to October 2011, which is a three-year period, and from October 2011 to April 2015, which is three and a half years, was also analysed.
The prices presented in this study are the final price paid by the consumer, without discounts, including VAT (where applicable), and any other taxes that may apply2.
It is also important to note that Croatia only joined the EU on 1 July 2013. Therefore, only 2014 and 2015 US prices were used for this country.
The average prices mentioned in this study include Portugal. The indicators concerning the price difference between Portugal and the European average, however, were calculated excluding Portugal.
To compare prices we first have to convert them to a common currency, and the euro was chosen because a number of Member States now use this currency. The exchange rate used was the annual average rate of the year to which the prices refer, with the exception of 2015, where the monthly average for March 2015 was used. The information on exchange rates was obtained from the Bank of Portugal website.
The comparison based on exchange rates has some limitations, however. It does not take into account the cost of living differences in each country. Generally speaking, in countries with higher salary levels product prices also tend to be higher. Comparing only the price of a given service in two countries without considering differences in the salary levels of their populations could lead to the conclusion that the country with the higher price would have the less affordable price. It is possible, however, for the difference in salary levels to more than offset the price difference between the two countries. Therefore, it is important to take into account the countries’ different levels of purchasing power.
For this purpose, US product prices based on purchasing power parity (PPP) were also compared. The use of PPP in the price comparisons for the postal sectors is quite interesting, notably because the postal sector is fairly labour-intensive3. It is important to note, however, that PPP indicators should be interpreted taking some of their limitations into account, particularly in terms of trends over the years and cross-country hierarchy comparison. As noted by Schreyer and Koechlin (2002), due to the level of uncertainty underlying any statistical indicator, small differences in the GDP level of each country can result in different hierarchies, which may not be statistically significant. In the context of this study, this means that although it is possible to conclude at the outset that there are significant differences between the countries at the top of a given hierarchy and those with lower prices for that hierarchy, the comparison between one country and those with similar rankings may not be that precise. It is also important to stress that the PPP-based comparison for each year is done at current prices and does not consider inflation. Thus, comparisons based on PPP should be interpreted according to the prices in several countries in that year.
The PPP indexes used in this study were those provided by Eurostat. Portugal was used as a benchmark, so the prices there are always the same in PPP and in euros. Therefore, the price of a service in PPP may be interpreted as being the price that service would have if it were provided in Portugal. The index used was that of the year of the corresponding prices, with the exception of 2015. For this year, since Eurostat indexes were not yet available, 2014 values were used. Therefore, since the same PPP index is used for 2014 and 2015, price variations (in PPP) between these two years will only reflect price variations in the local currency of each country.
1 For Portugal, in 2015 the prices in force from 01.03.2015 were used (available at
2 Currently, VAT is only applied to the analysed US products in Sweden, at a rate of 25%. Additionally, all postal items in Cyprus are subject to a 0.02 euro tax, called the refugee fund stamp.
3 According to WIK (2013), labour costs are over half of total costs for most USPs in Europe.
