USPS OIG Report: Geographic Variation in Productivity

August 19, 2019 – RISC-WP-19-006

  • The productivity of the Postal Service varies significantly around the country.
  • The principal factors we examined affecting productivity were weather, cost of living, and terrain ruggedness.
  • Identifying other factors causing productivity to vary around the country could give the Postal Service opportunities to pinpoint and address them.

As a follow-up to previous OIG work examining mail volume trends by geographic region, we examined total factor productivity data at the Origin and Destination Information System (ODIS) area. Analysis at this level allowed us to examine the effects that weather, cost of living, and terrain ruggedness have on productivity. We found that productivity varies significantly from geographic area to area.

The most important external determinant of productivity that we studied is weather. Places with more extreme weather conditions, other things being equal, exhibit lower productivity. In addition, we found that given the Postal Service’s nationally uniform pay scale, regional differences in cost of living affect real wages, and higher real wages are associated with higher productivity and vice-versa.

We also found some evidence that places with the greatest difference between the highest and lowest points of elevation (ruggedness) are associated with lower productivity levels.

But most critically, our research identifies areas where productivity is much higher or lower than would be expected given their weather, cost of living, and ruggedness. The identification and further study of these unknown factors could enable the Postal Service to address them, providing it with additional tools to improve productivity.

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Related: USPS OIG Report: Declines in Mail Volume Vary Widely across the United States

Source: USPS Office of Inspector General

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