UNITED STATES OF AMERICA
Before the
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
Postal Rate and Fee Changes, 2000
Docket No. R2000-1
)
OFFICE OF THE CONSUMER ADVOCATE
INTERROGATORIES
TO UNITED STATES POSTAL SERVICE
WITNESS BOZZO (OCAAJSPS-T15-1-20)
Februarv 4,200O
Pursuant
Commission,
requests
to sections
25 and 26 of the Rules of Practice
the Office of the Consumer
for production
OCAAJSPS-1-14
of documents.
Advocate
Instructions
hereby submits interrogatories
dated January
by reference.
Respectfully
submitted,
Director
Office of the Consumer Advocate
KENNETH
Attorney
1333 H Street, N.W.
Washington, D.C. 20268-0001
(202) 789-6830; Fax (202) 789-6819
and
included with OCA interrogatories
to the United States Postal Service,
hereby incorporated
of the Postal Rate
E. RICHARDSON
24, 2000, are
Docket No. R2000-1
-2.
OCANSPS-T-15-1.
USPS-LR-I-107
for your econometric
work.
presents
You have provided
printed as well as electronic
form.
the programs
and substantiation
a variety of files and comments
All of the analysis programs
in
appear to be in TSP
form.
(4
Please indicate why you chose TSP as the programming
SAS or, alternatively,
(b)
Substantial
accuracy
verification for TSP?
OCANSPS-T-15-2.
in place of
RATS, SYSTAT, STATA, or SPSS.
analysis is available in the published
and theoretical
language
of SAS programs.
literature on the computational
Do you have such independent
If so, please provide it.
Please provide SAS versions in printed as well as electronic
form of the TSP programs used in your work.
OCXUSPS-T-15-3.
your programs
You have provided
in Library Reference
various TSP programs.
USPS-L-I-107.
of the data input to
You subsequently
Please provide an Excel database
scrubbed data set as developed
OCAAJSPS-T-15-4.
an Excel database
scrub the data in
and documentation
of the
in your TSP programs.
Please refer to page 20 of your testimony,
lines 14-15, in
which you state, “Having concluded that some selection criteria were warranted...
(4
Please explain the basis for this statement.
(b)
Did you have a statistical
test to substantiate
the statement?
_‘I
If so, please
provide the relevant information.
OCAAJSPS-T-15-5.
Please refer to page 20 of your testimony,
lines 1-3, in which
you state that, “The absence of evidence that Dr. Bradley’s scrubs biased his estimated
elasticities
was not, however, sufficient to commend their continued
use in my study.”
Docket No. R2000-1
(a)
-3.
If you are verifying that Dr. Bradley was correct in his approach,
do you have a
statistical measure of how much better your approach is?
(b)
If you are verifying that Dr. Bradley was wrong in his approach,
please explain
further.
OCAIUSPS-T-15-6.
You indicate in your testimony
“First, I have fewer observations
time period..
(4
because
at page 21, lines 16-17, that,
of the use of quarterly
data over a shorter
.‘I
Please explain why you used quarterly data instead of following the procedures
Dr. Bradley used in Docket No. R97-I,
04
Please explain why you chose to use a shorter calendar
period of time than Dr.
Bradley used in Docket No. R97-1 for your analysis.
OCAIUSPS-T-15-7.
You state in your testimony at page 21, line 22, “Therefore,
believe the updated
sample selection
statistical test to substantiate
OCA/USPS-T-15-8.
this statement?
Is it your conclusion
measure the same degree of automation
”
Do you have a
If so, please provide it.
Please refer to your discussion
23-25 of your testimony.
that a computed
criteria are not ‘excessive.’
I
of the Manual Ratio at pages
that a computed
manual
ratio would
in small, medium, and large MODS sites, and
manual ratio number would be comparable
from site to site?
Please
explain your answer.
OCAAJSPS-T-15-9.
You indicate
“The present analysis can be interpreted
function,
structure.”
or a generalized
in your testimony
either in terms of the classical
‘non-minimum
A review of standard
at page 33, lines 2-4, that
economic
cost
function’
with
minimum cost
a generally
theory indicates that economists
similar
derive a
Docket No. R2000-1
-4-
variety of marginal relationships
functions.
variety
in analyzing
production,
cost, and input factor demand
You have empirical data input from a variety of mail processing
of functions.
Some Postal mail processing
operated
on a cost minimization
functions
could conceivably
econometric
analyses
facilities
basis, and other Postal
be operated
inefficiently.
facilities for a
and functions
processing
may be
facilities
and
As you use data as input to your
from all facilities, are your conclusions
independent
of whether
the facilities are cost minimizers?
OCAAJSPS-T-15-10.
“...capital
In your testimony
and labor variabilities
that the cost pool-level production
(4
will be identical,
Do you have any proof or indication
You
quote
extensively;
(4
in equilibrium,
Dr. Bradley’s
based on actual Postal operations
mail processing
was homotheticity
testimony
12-14,
implies
No. R97-1
in your testimony
that changing
at page 40, lines
the level of output
of the
will not alter relative factor demands such as the capital /labor ratio, in
equilibrium
(and other things equal).”
Cd)
What would be the impact of relaxing your assumption
(4
Does one normally
study?
in Docket
one of his assumptions?
of your assertion
that “Homotheticity
that the
If so, please explain.
Please provide a derivation
operation
under the assumption
(or cost) functions are homofhefic.”
functions are in fact homothetic?
W
at page 40, lines 10-12, you assert that
assume
homotheticity
If not, under what circumstances
assumed or not assumed?
on homotheticity?
in developing
an econometric
is the homotheticity
assumption
cost
either
Docket No. R2000-1
OCNUSPS-T-15-11:
-5-
You indicate
in your testimony
at pages
“manual ratio” variable is a measure of the degree of automation
the site’s organization
(4
@I
(4
and is an indicator of
Is the manual ratio dependent
on the location of the mail processing
the network of mail processing
facilities?
Is the “manual
ratio” dependent
mail processing
facility serves?
Is the “manual
ratio” dependent
on the characteristics
on the characteristics
plant?
ratio” dependent
facility within
of the territory which the
of the sorting patterns
If your answer is “yes”, please explain in detail
how the “manual ratio” is dependent
Is the “manual
that the
of mailflows in letter and flat sorting operations.
within the mail processing
(4
46-47
on the characteristics
of the sorting patterns.
on the amount of equipment
in the mail sorting
plant?
OCANSPS-T-15-12.
You appear to base your analysis on TPF (total pieces fed).
Please provide FHP (first handled pieces) and TPH (total pieces handled) for all cases
in which you provide TPF, including the relevant Excel spreadsheets.
OCANSPS-T-15-13.
assumption
You state
in your testimony
at pages
54-55
that,
“The
implicit in the Postal Service’s method that major changes in operations
not take the form of drastic intra-year
national deployments
years to complete.”
of new equipment
changes
is not very restrictive,
and substantial
will
given that most
changes to operations
require
How many years are required for the national deployments
and/or
other activities to which you refer?
OCANSPS-T-15-14.
“Likewise,
You state in your testimony
at page 55, lines 3-6, that,
it is hard to envision rapid and drastic changes in the average work content of
Docket No. R2000-1
-6-
the mail subclasses
discounts
in the absence of correspondingly
and other economic
the above envisioning,
drastic changes to worksharing
incentives facing mailers.”
In order to have a basis for
please indicate the length of time after which one might find such
changes.
OCANSPS-T-15-15.
Your testimony
at page 56, line 9, indicates that the manual
ratio should be treated as non-volume-variable.
(a)
the position
of the mail processing
Could the manual ratio depend upon,
facility in the network
of mail processing
facilities;
(b)
the internal layout of the mail processing
(c)
the size of the mail processing
(d)
the total TPF in a given operation?
OCANSPS-T-15-16.
as few mathematical
underlying
facility as measured
in TPF; and/or
You state in your testimony at page 65, lines 13-l 5, that your
choice of a translog functions
place
facility;
is chosen, at least in part, because,
restrictions
cost and production
as possible
“This allows me to
on the functional
functions.”
(a)
What are the underlying
restrictions that you have avoided?
(b)
What are the underlying
restrictions to which your study is subject?
(cl
Your discussion
at the bottom
supposing
contradictory
of the translog function specifically
of the page in footnote
a translog cost function.
to your testimony.
In your discussion
you
a derived
not discussed
mentions a cost function, but
25 you indicate that you are not pre-
It would appear that your technical
point is
Please explain.
OCANSPS-T-15-17.
have
form of the
demand
of translog cost and production
function--the
labor
demand
functions
function.
Docket No. R2000-1
However,
-7-
the estimation
testimony.
of such a function
appears
to be the key focus
The demand for labor by a firm is generally expressed
of the marginal product of labor with quantities being expressed
of your
in terms of the value
in terms of a wage rate
and units of labor.
(a)
What mathematical
restrictions
have you put on the function that you are trying to
estimate?
(b)
Does this labor demand function derive from another function, possibly cost and
production
functions?
mathematical
conclusions
restrictions
important
assumptions
feature of the translog
with particular
that subsequently
attention
to
may lead to
about homotheticity.
You state in your testimony
restrict the output elasticities
every observation....”
and/or
similar to your conclusions
OCAIUSPS-T-15-18.
“Another
Please show this derivation,
at page 66, lines 1-3, that,
labor demand
(volume-variability
function
is that it does not
factors) to be the same for every site or
Please state all additional
important
features
of your translog
labor demand function that have not been previously highlighted or stated.
OCALlSPS-T-15-19.
In reference to non-MODS
operations,
in your testimony
at
page 134, lines 17-19, you state, “I expect that the Postal Service will be able to provide
quantitative
the future.”
evidence to bolster the quantitative
Given your knowledge
analysis for some of these operations
in
of the Postal Service’s work in this area, when will
this evidence be available?
OCAIUSPS-T-15-20.
On page
135, line 7, of your
indicate that time and resource constraints
witness Bradley’s BMC models presented
prevented
prepared
testimony,
you
the Postal Service from updating
in Docket No. R97-I.
Docket No. R2000-1
-8.
(a)
in person years, did you estimate
How much time, as measured
that such an
effort would require?
(b)
For purposes
of comparison,
how much time was spent in the development
the current analysis that you are presenting
years?
in this case, as measured
of
in person
CERTIFICATE
OF SERVICE
I hereby certify that I have this date served the foregoing
participants
of record in this proceeding
practice.
in accordance
with section
,
&bv--
tep anie S. Wallace
Washington, D.C. 20268-0001
February 4,200O
document
upon all
12 of the rules of