USPS_HDS

This report documents the findings of the United States Postal Service’s Household Diary Study (HDS) for Fiscal Year (FY) 2007. The three main study purposes are to:

· Measure the mail sent and received by U.S. households,

· Provide a means to track household mail trends over time, and

· Make comparisons of mail use between different types of households.

The report examines these trends in the context of changes and developments in the wider markets for communications and package delivery.

Background

The Household Diary Study survey, fielded continuously since 1987, aims to collect information on household use of the mail and how that use changes over time. The survey collects household information on demographics, lifestyle, attitudes toward mail and advertising, bill payment behavior, and use of the Internet and other information technologies.

The FY 2007 report covers Government Fiscal Year 2007, with comparisons to 2005 and 2006.

The HDS collects information on
household mail use and provides a look
at how that use changes over time.

Overview

In 2007, U.S. households received 150.9 billion pieces of mail, and sent 21.2 billion, as seen in Table E.1. Mail sent or received by households constituted 79 percent of total domestic mail in FY 2007. Fifty-five percent of the mail households received was sent Standard Mail. Only four percent of household mail (and about three percent of total mail) was sent between households; the rest was sent between households and nonhouseholds.

Table E.1:
: Mail Received and Sent by Households

(Billions of Pieces)

Mail Classification	Received	Sent
First-Class Mail	58.9	20.8
Standard Regular Mail*	69.9	—
Standard Nonprofit Mail	13.5	—
Periodicals	6.6	—
Package Services**	1.7	.3
Expedited	.3	.2
Total	150.9	21.2
Household to Household	5.9
Total Mail Sent and Received by Households	166.2
FY 2007 RPW Total***	211.4
Nonhousehold to Nonhousehold (Residual)	45.2
Unaddressed	12.6	—

Source: HDS Diary Sample, FY 2007.
Notes: Expedited includes Priority Mail and Express Mail.
*Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted as separate pieces.
**Includes First-Class and Standard Mail packages.
***Does not include international mail.

Mail Markets

The Household Diary Study examines mail by the markets it serves. This design cuts across classes, but provides a foundation for understanding mail flows and the marketplace changes that affect them. Table E.2 shows the volume of household mail by market for 2005 through 2007.

Thirty-five percent of household mail contains correspondence and transactions, down slightly from 36 percent in 2005. In part, the decline in the percentage of correspondence is a continuation of long-term trends, but it is also related to changing demographics. Younger households both send and receive fewer pieces of correspondence mail, a result of younger households’ comfort with and use of the Internet, and their lower average income level.

Table E.2:
: Household Mail Volume Received and Sent by Market Served

(Billions of Pieces)

Market	2005	2006	2007
Correspondence	16.6	15.3	14.6
Transactions	42.7	42.7	43.3
Advertising*	101.9	104.9	100.3
Periodicals	6.7	6.7	6.6
Packages	3.1	3.2	3.1
Unclassified	3.8	5.0	6.2
Total	167.0	170.2	166.2

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
Correspondence and Transactions includes 7.9 billion pieces of First-Class advertising-enclosed mail (excluded from totals).
Advertising excludes unsolicited samples of periodicals and packages
(0.2 billion pieces).
Package Volumes include ground packages and expedited.
Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received from Netflix, Blockbuster, etc., reported in First- Class Mail letters
in Tables E.1, 1.5 and 1.6.
*Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted as separate pieces.

The increase in e-mail correspondence
and the movement towards electronic bill payment have affected mail volumes.

Electronic alternatives also affect transactions mail volume. Automatic deduction and Internet bill payment account for a growing share of household bill payments over time. In fact, over the past five years, the percentage of bills paid by electronic methods increased from 19 percent in 2003 to 32 percent in 2007. In contrast, bills paid by mail decreased from 74 percent to 62 percent of total payments during the same time. In-person payments have remained unchanged from 2003, with 7 percent of all bills paid in person in 2007. The number of bills and statements households received through the mail decreased on a per household basis, while the number of bills received over the Internet continues to grow rapidly.

Advertising mail represented more than half of all mail received by households in 2007. As shown in Table E.3, 83 percent of all advertising mail received by households is Standard Mail (83.4 billion pieces). The remainder consists of First-Class Mail; either stand-alone advertising (9.0 billion pieces), or secondary advertising that is sent along with other matter (7.9 billion pieces).

Over time, the data show a decline in the percentage of First-Class advertising mail.

Table E.3:
: Advertising by Mail Class

Mail Classification	Volume (Billions)	Percent of Total Advertising
First-Class Advertising	16.9	17%
Standard Regular Mail	69.9	70%
Standard Nonprofit Mail	13.5	13%
Total Advertising Mail	100.5	100%

Source: HDS Diary Sample, FY 2007.
Note: Total includes unsolicited samples of packages and periodicals.

As shown in Table E.4, households received 6.6 billion pieces of Periodicals mail in 2007, slightly less than in 2006 and 2005. Nearly three-quarters of these were magazines. Newspapers are only 19% of total Periodicals, down from 35% in 1987. Contributors to the decline in newspaper volumes are lower circulation and readership levels as well as the growth of the Internet as an alternative delivery method.

Table E.4:
: Periodical Type Received

Mail Classification	Volume (Billions)	Percent of Total Periodicals
Newspapers	1.3	19%
Magazines	4.9	73%
Unclassified	0.5	8%
Total Periodicals	6.6	100%

Source: Household Diary Study, FY 2007.

In 2007, households received 2.5 billion and sent 742 million packages. Packages sent increased 11 percent over 2006. Delivery from mail order and Internet retailers is an important driver of package volume, and while the HDS data is not designed to quantify it, there are indications that online auction sites (like eBay) are responsible for some of the recent increase in packages sent by households.

Table E.5:
: Packages Received and Sent via the U.S. Postal Service

(Millions of Pieces)

Mail Classification	2007
	Received		Sent
	Number	Percent	Number	Percent
First-Class Mail	974	39%	445	60%
Expedited	302	12%	150	20%
Standard Mail	653	26%	—	—
Package Services	527	21%	108	15%
Unclassified	71	3%	39	5%
Total Packages	2,528	100%	742	100%

Source: HDS Diary Sample, FY 2007.
Notes:
: Totals may not sum due to rounding.
Expedited includes Priority Mail and Express Mail.
First-Class Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received from Netflix, Blockbuster, etc., reported in First- Class Mail letters in Tables E.1, 1.5 and 1.6.

Table 1.1:
: Total Mail Volume: FY 1987, 2005, 2006 and 2007

(Billions of Pieces)

Mail Classification	1987	2005	2006	2007
First-Class Mail:	78.6	98.1	97.4	95.9
First-Class Letters:	75.3	92.4	91.8	90.1
Single-Piece	53.9	43.4	41.9	40.1
Workshare	21.4	49.1	49.9	50.0
First-Class Cards:	3.2	5.6	5.7	5.8
Single-Piece	2.5	2.5	2.3	2.2
Workshare	.8	3.1	3.4	3.6
Priority Mail	.4	.9	.9	.9
Express Mail	0	.1	.1	.1
Periodicals	10.3	9.1	9.0	8.8
Standard Mail:	59.4	100.9	102.5	103.5
Regular and ECR:	48.3	85.9	87.9	88.7
Regular	21.7	53.9	54.9	56.5
Enhanced Carrier Route	26.6	32.0	33.0	32.2
Nonprofit and NP ECR:	10.9	15.0	14.6	14.8
Nonprofit	8.6	12.0	12.0	12.1
NP Enhanced Carrier Route	2.3	3.1	2.6	2.7
Package Services:	.6	1.2	1.2	1.2
Parcel Post	.1	.4	.4	.4
Other Domestic Mail	.5	.7	1.1	1.1
International Mail	.8	.9	.8	.8
Total	153.2	211.7	213.0	212.2

Source: RPW Reports.
Note: Totals may not sum due to rounding.

Table 1.2:
: Total Mail: Revenue, Pieces, and Weight by Shape, FY 2007

Mail Classification	Revenue (Millions of Dollars)				Pieces (Millions of Pieces)				Weight (Millions of Pounds)
Mail Classification	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total
First-Class Mail:	32,078	4,394	859	37,331	91,288	4,080	530	95,898	3,337	824	172	4,333
First-Class Letters:	30,809	4,394	859	36,063	85,490	4,080	530	90,100	3,280	824	172	4,276
Single-Piece	15,062	3,694	852	19,609	36,441	3,157	524	40,122	1,096	680	171	1,947
Workshare	15,747	700	7	16,454	49,049	923	6	49,978	2,185	143	1	2,329
First-Class Cards:	1,268	—	—	1,268	5,798	—	—	5,798	57	—	—	57
Single-Piece	547	—	—	547	2,142	—	—	2,142	14	—	—	14
Workshare	721	—	—	721	3,656	—	—	3,656	43	—	—	43
Priority Mail	99	1,219	3,910	5,227	23	277	597	897	2	239	1,555	1,796
Periodicals	22	2144	2	2,168	129	8,664	3	8,796	9	3,880	7	3,896
Standard Mail:	11,256	8,876	541	20,673	63,807	39,042	667	103,516	3,058	8,424	334	11,815
Regular and ECR:	9,931	8,289	518	18,738	52,587	35,513	632	88,732	2,506	7,902	317	10,726
Regular	8,791	3,669	516	12,977	44,996	10,930	629	56,555	2,150	2,730	316	5,197
Enhanced Carrier Route	1,139	4,620	2	5,761	7,591	24,583	4	32,177	356	5,172	1	5,530
Nonprofit and NP ECR:	1,325	587	23	1,936	11,220	3,529	35	14,784	551	522	16	1,089
Nonprofit	1,233	399	23	1,655	10,150	1,929	35	12,114	509	343	16	868
NP Enhanced Carrier Route	92	188	0	281	1,070	1,600	0	2,670	42	179	0	221
Package Services:	—	342	1,960	2,302	—	347	816	1,163	—	464	2,844	3,309
Parcel Post	—	12	1,194	1,206	—	3	346	349	—	4	1,526	1,529
Total	43,455	16,974	7,273	67,702	155,246	52,410	2,614	210,270	6,405	13,830	4,913	25,148
Other:
Express Mail				951				55				53
Other Domestic Mail				0				1,077				174
International Mail				1,763				833				268
Total				70,415				212,234				25,643

Source: RPW Reports.
Note: Revenue data do not include fees. Totals may not sum due to rounding.

Table 1.3:
: Total Mail: Revenue and Weight per Piece by Shape, FY 2007

Mail Classification	Revenue per Piece (Dollars)				Weight per Piece (Ounces)
Mail Classification	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total
First-Class Mail:	.351	1.077	1.621	.389	.585	3.229	5.192	.723
First-Class Letters:	.360	1.077	1.621	.400	.614	3.229	5.192	.759
Single-Piece	.413	1.170	1.626	.489	.481	3.448	5.208	.776
Workshare	.321	.758	1.156	.329	.713	2.483	3.824	.746
First-Class Cards:	.219	—	—	.219	.158	—	—	.158
Single-Piece	.256	—	—	.256	.108	—	—	.108
Workshare	.197	—	—	.197	.186	—	—	.186
Priority Mail	4.324	4.406	6.545	5.829	1.455	13.793	41.664	32.041
Periodicals	.173	.247	.787	.247	1.058	7.165	37.661	7.086
Standard Mail:	.176	.227	.811	.200	.767	3.452	8.003	1.826
Regular and ECR:	.189	.233	.820	.211	.763	3.560	8.032	1.934
Regular	.195	.336	.821	.229	.765	3.997	8.050	1.470
Enhanced Carrier Route	.150	.188	.490	.179	.751	3.366	4.952	2.750
Nonprofit and NP ECR:	.118	.166	.665	.131	.786	2.365	7.468	1.179
Nonprofit	.121	.207	.667	.137	.802	2.841	7.497	1.146
NP Enhanced Carrier Route	.086	.118	.363	.105	.632	1.790	2.895	1.326
Package Services:	—	.984	2.403	1.980	—	21.400	55.785	45.523
Parcel Post	—	3.944	3.456	3.460	—	19.285	70.624	70.181
Total	.280	.324	2.783	.322	.660	4.222	30.074	1.914
Other:
Express Mail				17.358				15.350
Other Domestic Mail				.000				2.583
International Mail				2.117				5.160
Total				.332				1.933

Source: RPW Reports.

Mail Flows

Mail volume can be broken into four basic flows, based on origin and destination. These flows are:

1) Household to household,

2) Household to nonhousehold,

3) Nonhousehold to household, and

4) Nonhousehold to nonhousehold.

Table 1.4a shows the total mail in each flow, and Table 1.4b shows pieces per household per week.

Table 1.4a: Total Domestic Mail Flows

(Billions of Pieces)

Originating In:	Destinating In:
Originating In:	Household	Nonhousehold	Total Originating
Household	5.9	15.3	21.2
Nonhousehold	145.0	45.2	190.2
Total Destinating	150.9	60.5	211.4

Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to rounding.

Table 1.4b: Domestic Mail Flows per Household per Week

Originating In:	Destinating In:
Originating In:	Household	Nonhousehold
Household	1.0	2.5
Nonhousehold	24.0	N/A

Source: Household Diary Study, FY 2007.

Household Mail

As shown in Table 1.4a, domestic mail to and from households constituted almost 80 percent of total mail volume in 2007. This equates to 27.5 pieces per week sent and received by U.S. households. Table 1.5 presents the volumes of mail sent and received by households as estimated from the Household Diary Study. The table shows the categories in which the households record their mail. Households received 150.9 billion pieces of mail and sent 21.2 billion. Both of these totals include the 5.9 billion pieces of mail that households sent to each other. The total mail received or sent by households in FY 2007 was 166.2 billion pieces.

In FY 2007, households received 12.6 billion pieces of unaddressed mail. These pieces were predominately the flyers and inserts associated with Standard Mail pieces.

Table 1.5: Mail Received and Sent by Households

(Billions of Pieces)

Mail Classification	Received	Sent
First-Class Mail	58.9	20.8
Standard Regular Mail*	69.9	—
Standard Nonprofit Mail	13.5	—
Periodicals	6.6	—
Packages**	1.7	.3
Expedited	.3	.2
Total	150.9	21.2
Household to Household	5.9
Total Mail Received and Sent by Households	166.2
FY 2007 RPW Total***	211.4
Nonhousehold to Nonhousehold (Residual)	45.2
Unaddressed	12.6	—

Table 1.6 presents these data in two other forms, annual volumes per household and pieces per household per week. Many of the subsequent results in this report are presented in terms of pieces per household per week.

Table 1.6: Pieces Received and Sent per Household

Classification	Annual Pieces per HH	Pieces per HH per Week
Mail Received
First-Class Mail	507	9.8
Standard Regular Mail*	602	11.6
Standard Nonprofit Mail	117	2.2
Periodicals	57	1.1
Packages**	15	.3
Expedited	3	0
Total Mail Received	1,301	25.0
Mail Sent
First-Class Mail:	179	3.4
Packages**	2	0
Expedited	1	0
Total Mail Sent	183	3.5
Unaddressed	108	2.1

Source: HDS Diary Sample, FY 2007.
Notes: Totals may not sum due to rounding.
* Prior to 2007, Detached Address Labels (3 billion pieces in 2006) were counted as separate pieces.
** Includes First-Class and Standard Mail packages.

Classes and Markets

· First-Class Mail is used to send transactional mail, correspondence and advertising. Because it is limited to pieces weighing thirteen ounces or less, it is primarily composed of letters and cards.

· Standard Mail is advertising mail. For the most part, Standard Mail is composed of letters and flats, although it contains a few postcards and packages as well.

· Periodicals are magazines and newspapers, and are predominantly flat shaped.

Priority Mail and Express Mail are expedited services for delivering correspondence, transactional mail, and merchandise. Priority and Express pieces can be of any shape except postcards.

· Package Services is used to deliver merchandise, books, catalogs, and media such as CDs and DVDs. Most of this mail is parcel shaped.

Table 1.7 crosswalks between classes of mail and the markets they serve.

Demographic Characteristics of U.S. Households

This section develops breakouts of households by demographic categories that influence the volume of mail sent and received. It looks at both traditional and newly emerging factors. The following chapters will show how mail volume varies with these household characteristics.

Income, Education, and Age

Traditionally, mail use was largely determined by household income, education and age. As Table 2.4 shows, income and education are strongly correlated with each other, as expected.

The relationship between income and age, shown in Table 2.5, is somewhat more complicated. Up to retirement, household income and age are fairly closely related. After retirement, households earn substantially less, although by that point mail behavior is pretty well set, and older households continue to receive similar amounts of advertising and periodicals, and pay similar amounts of bills, even though their income declines.

Table 2.4:
: Households by Income and Education

(Millions of Households)

Household Income (Thousands)	Educational Attainment of Head of Household				Total
Household Income (Thousands)	Less than High School	High School Graduate	Some College or Technical School	College Graduate	Total
Under $35	9.2	10.2	6.9	3.3	29.6
$35 to $65	4.0	11.2	7.9	8.3	31.3
$65 to $100	1.3	8.1	6.4	10.8	26.6
Over $100	0.5	2.9	3.2	11.9	18.5
Don’t know / Refused	0.9	2.6	2.4	4.0	9.9
Total	16.0	35.0	26.7	38.3	116.0

Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to rounding.

Table 2.5:
: Households by Income and Age

(Millions of Households)

Household Income (Thousands)	Age of Head of Household				Total
Household Income (Thousands)	Under 35	35 to 54	Over 55	Don’t Know/ Refused	Total
Under $35	7.7	7.3	14.6	—	29.6
$35 to $65	8.5	11.9	10.9	—	31.3
$65 to $100	5.5	13.5	7.6	—	26.6
Over $100	2.9	10.6	5.0	—	18.5
Don’t know / Refused	1.3	3.5	4.8	0.4	9.9
Total	25.9	46.8	42.8	0.5	116.0

Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to rounding.

Household Size

The majority of U.S. households include either one or two adults, but households with three or more adults make up 16 percent of the total. Once considered the norm, nuclear families - two adults and at least one child - now account for only 23 percent of households (per the U.S. Census Bureau). The changing composition of households impacted the amount and kinds of mail sent and received by households over the past 20 years, generating more and different kinds of advertising mail, as well as affecting transaction mail trends (bills tend to be tied to households as much as to individuals).

Table 2.6:
: Households by Size

(Millions of Households)

Household Size
One person	18.1
Two	45.3
Three	19.8
Four	20.1
Five or more	12.5
Don’t know / Refused	.1
Total	116.0

Source: HDS Diary Sample, FY 2007.
Note: Total may not sum due to rounding.

Table 2.7:
: Households by Number of Adults

(Millions of Households)

Number of Adults
One	21.8
Two	76.5
Three or more	17.8
Total	116.0

Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to rounding.

Internet Access

Access to and use of new technologies such as personal computers and the Internet have a large and growing impact on mail use. Although a significant number of pieces both sent and received by households are still related to bills and statements, electronic activity in this area is diverting mail once used for these purposes. On the other hand, on-line shopping potentially adds packages and catalog delivery to the Postal Service mailstream.

Table 2.8 shows that 77 percent of households have Internet access. The highest levels of access are within households with incomes over $100,000; 95 percent of such households have Internet access, as seen in Figure 2.1. In comparison, 42 percent of households with incomes under $35,000 have Internet access. For households without Internet access, 66 percent indicated they planned to purchase the service within the next year.

Table 2.8:
: Households by Type of Internet Access

(Millions of Households)

Type of Internet Access
Broadband	63.6
Dial-up	25.8
None	26.6
Total	116.0

Source: HDS Diary Sample, FY 2007.
Note: Totals may not sum due to rounding.

Seventy-three percent of wired households, or 54 percent of the total, have broadband access (DSL, cable, or T1). Figure 2.2 shows the trend in broadband connections. The rapid growth of broadband expands the potential scope of electronic diversion of the mail. A fast, always-on connection to the Internet becomes a stronger alternative channel for the delivery of entertainment, information, and communication. As more households begin using broadband, we expect to see effects not only on bill payments, but also bill and statement presentment, periodicals, and perhaps even advertising mail.

Figure 2.1:
: PC Ownership and Internet Access (Percent of U.S. Households)

Household Income (Thousands)	Own PC	Internet Access
under $35K	53%	42%
$35K-$65K	81%	74%
$65K-$100K	93%	90%
$100K+	96%	95%
Don’t know/Refused	74%	67%

Source: HDS Recruitment Data, FY 2007.

Figure 2.2:
: Broadband Subscribers (Millions)

Calendar Year	Broadband Subscribers
1998	0.5
1999	1.4
2000	5.8
2001	11
2002	17.4
2003	24.6
2004	31
2005	40
2006	50.9
2007	61.1

Source: Leichtman Research Group.

Use of the Post Office

A rented mailbox is one alternative that households use to manage their mail. Households that rent mailboxes overwhelmingly use the Postal Service for this service, with less than one percent of all households in the U.S. renting a box from a private company. As seen in Figure 2.3, in most cases, higher income households are slightly more likely to use a post office box than lower income households, a pattern similar to prior years. ~~Overall~~P~~, p~~ost office box use, however, declined over the past six years, after 2001, largely as a result of price increases, with less than 3.7 percent of U.S. households renting a box from the Postal Service in 2007, compared to ten percent in 2001.

The Postal Service currently owns and operates almost 37 thousand post office locations throughout the United States. As shown in Figure 2.4, the use of post offices for mailing services continues to dominate the mail service industry. Over 83 percent of all U.S. households patronize a post office at least once a month, while just eleven percent visit a private mailing company. Over 35 percent of all households in the U.S. visit the post office three or more times in a month. Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain stable. Only a little more than 10% of households visited private mailing companies in both 2006 and 2007.

Figure 2.3:
: Household Use of Rented Mailboxes

Household Income (Thousands)	USPS	Private Service
under $35K	3.2%	1.6%
$35K-$65K	3.5%	0.8%
$65K-$100K	3.6%	1.3%
$100K+	3.9%	1.4%

Source: HDS Recruitment Data, FY 2007.

Figure 2.4:
: Household Visits to Post Office in Past Month

Number of Visits	USPS		Private Service
Number of Visits	2006	2007	2006	2007
1 - 2	44%	48%	9%	9%
3 - 6	29%	26%	2%	2%
7 or more	12%	9%	1%	0%

Source: HDS Recruitment Data, FY 2006 and 2007.

Chapter 3: Correspondence

Introduction

This chapter examines correspondence mail among households and between households and businesses including letters, greeting cards, invitations, and announcements. In several cases, this chapter and several following it examine comparisons in data between 2005 and 2007, providing a better illustration of mail trends over time

Correspondence Mail Volume

Total correspondence sent and received represents about 9 percent of all household mail volumes, as shown in Table E.2. Below, Table 3.1 provides a recent history of total correspondence volumes, showing a 12 percent decline from 2005 to 2007. Personal correspondence, which is essentially household to household mail, continues to decline as it has for more than 15 years. In 1987, households reported receiving 1.6 pieces of personal correspondence each week. By 2007, personal correspondence received declined to 0.9 pieces per household per week.

To a large extent, this decline stemmed from changes in communication technology such as affordable long distance telephone service and more recently, e-mail, the Internet, and cellular communications – all of which provide an alternative to personal letters and business inquiries. Such advances completely transformed the marketplace and continue to have an impact on personal correspondence.

Correspondence Mail and Household Characteristics

The following tables break down correspondence mail sent and received by households using the demographic categories developed in Chapter 2.

Income, Education and Age

Table 3.2 on the following page shows that both household income and educational attainment have a strong effect on correspondence received. However, as Table 3.3 shows, within a given educational category, income has much less of an effect on the amount of correspondence mail a household sends.

Table 3.1:
: First Class Correspondence Mail Sent and Received by Sector

Sector	Volume (Millions of Pieces)			Change, 2005-2007
Sector	2005	2006	2007	Change, 2005-2007
HH to HH	5,870	6,079	5,610	-4.4%
NHH to HH	8,647	7,227	6,896	-20.2%
HH to NHH	2,119	2,034	2,132	.6%
Total	16,636	15,340	14,638	-12.0%
Sector	Pieces per Household per Week			Share of 2007 Total
Sector	2005	2006	2007	Share of 2007 Total
HH to HH	1.0	1.0	.9	38.3%
NHH to HH	1.5	1.2	1.1	47.1%
HH to NHH	.4	.3	.4	14.6%
Total	2.8	2.6	2.4

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
2006 Sent volumes were revised due to an understated adjustment factor.
Totals may not sum due to rounding.

Table 3.2:
: Correspondence Mail Received by Income and Education

(Pieces per Household per Week)

Household Income (Thousands)	Educational Attainment of Head of Household				Average
Household Income (Thousands)	Less than High School	High School Graduate	Some College or Technical School	College Graduate	Average
Under $35	1.5	1.3	1.6	1.4	1.5
$35 to $65	1.8	1.7	2.2	2.0	1.9
$65 to $100	3.7	2.2	2.1	2.6	2.4
Over $100	2.2	2.2	2.4	3.0	2.7
Average	1.8	1.8	2.0	2.5	2.1

Source: HDS Diary Sample, FY 2007.
Note: Excludes Don’t Know/Refused.

Table 3.3:
: Correspondence Mail Sent by Income and Education

(Pieces per Household per Week)

Household Income (Thousands)	Educational Attainment of Head of Household				Average
Household Income (Thousands)	Less than High School	High School Graduate	Some College or Technical School	College Graduate	Average
Under $35	1.0	1.1	1.1	1.0	1.0
$35 to $65	.8	1.0	1.4	1.4	1.2
$65 to $100	1.4	1.3	1.2	1.6	1.4
Over $100	.5	1.1	1.4	1.7	1.6
Average	1.0	1.1	1.3	1.5	1.3

Source: HDS Diary Sample, FY 2007.
Note: Excludes Don’t Know/Refused.

Household Size

As expected, household size has a positive impact on correspondence mail. Tables 3.6 and 3.7 show that the jump from one person to two is associated with considerable jumps in correspondence mail volume, although further increases in size do not have nearly the same effect. As shown in Table 3.7, these increases are generally due to the presence of an additional adult in the household.

Table 3.6:
: Correspondence Mail Received and Sent
by Household Size

(Pieces per Household per Week)

Household Size	Received	Sent
One person	1.3	.9
Two	2.1	1.4
Three	2.1	1.2
Four	2.4	1.4
Five or more	2.6	1.6
Total	2.1	1.3

Source: HDS Diary Sample, FY 2007.

Table 3.7:
: Correspondence Mail Received and Sent
by Number of Adults in Household

(Pieces per Household per Week)

Number of Adults	Received	Sent
One	1.3	.8
Two	2.2	1.4
Three or more	2.5	1.4
Average	2.1	1.3

Source: HDS Diary Sample, FY 2007.

Internet Access

Households with Internet access (Broadband and Dial-up) also tend to send and receive more correspondence mail than households without such service. The explanation for this somewhat counterintuitive result is the high correlation among income, educational attainment, and the presence of an Internet connection in the home. As Table 3.9 shows, households with Internet access have a greater average income than households without. Similarly, households with Internet access have a higher level of education than households without. In fact, these correlations could be a warning sign for mail, since more volume goes to households that are vulnerable to diversion.

Table 3.8:
Correspondence Mail Received and Sent by Type of Internet Access

(Pieces per Household per Week)

Type of Internet Access	Received	Sent
Broadband	2.3	1.3
Dial-up	2.2	1.4
None	1.5	1.1
Average	2.1	1.3

Source: HDS Diary Sample, FY 2007.

Table 3.9:
Income and Education by Type of Internet Access

(Pieces per Household per Week)

Type of Internet Access	Median Income	% w/ College Degree
Broadband	77,880	39%
Dial-up	56,671	24%
None	36,033	11%

Source: HDS Diary Sample, FY 2007.

Personal Correspondence

In FY 2007, personal correspondence accounted for an average 0.9 pieces per week, .1 less than in 2005 and 2006. Table 3.10 shows the total volumes and average number of pieces by personal correspondence type.

The drop in “other” accounts for most of the per-household decrease in personal correspondence mail between 2005 and 2007. The number of Internet greeting cards declined by a much greater percentage than mailed correspondence.

Table 3.10:
: Personal Correspondence Sent and Received

Correspondence Type	Volume (Millions of Pieces)			Change, 2005-2007
Correspondence Type	2005	2006	2007	Change, 2005-2007
Personal Letters	1,227	1,138	1,116	-9.1%
Holiday Greeting Cards	2,169	2,612	2,117	-2.4%
Non-Holiday Greeting Cards	1,418	1,323	1,454	2.5%
Invitations	657	566	597	-9.2%
Announcements	124	141	130	4.9%
Other Personal	275	299	196	-28.7%
Total	5,870	6,079	5,610	-4.4%
Internet Cards	1,399	999	942	-32.6%
Correspondence Type	Pieces per Household per Week			Share of 2007 Total
Correspondence Type	2005	2006	2007	Share of 2007 Total
Personal Letters	.2	.2	.2	17.0%
Holiday Greeting Cards	.4	.4	.4	32.3%
Non-Holiday Greeting Cards	.2	.2	.2	22.2%
Invitations	.1	.1	.1	9.1%
Announcements	0	0	0	2.0%
Other Personal	0	.1	0	3.0%
Total	1.0	1.0	.9	85.6%
Internet Cards	.2	.2	.2	14.4%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
Totals may not sum due to rounding.
2006 Sent volumes were revised due to an understated adjustment factor.

Figure 3.1:
: Personal Correspondence Sent by Income Group

(Pieces per Household per Year)

Household Income (Thousands)	Letters	Holiday Greeting Cards	Greeting Cards	Internet Cards
Under $35	7.4	17.1	8.1	4.6
$35 to $65	8.9	17.1	12.6	9.3
$65 to $100	10.8	20.4	13.5	10.8
Over $100	11.8	18.2	17.4	8.9

Source: HDS Diary Sample, FY 2007.

Figure 3.2:
: Personal Correspondence Sent by Age Cohort

(Pieces per Household per Year)

Age	Letters	Holiday Greeting Cards	Greeting Cards	Internet Cards
Under 35	8.3	9.8	9.8	12.1
35 to 54	8.7	19.3	12.1	8.1
Over 55	11.3	22.4	14.7	5.8

Source: HDS Diary Sample, FY 2007.

Figure 3.1 above shows the major personal correspondence types by income. Personal correspondence sent by households varies with household income; for example, in 2007, households with higher incomes (above $65,000 annually) were more likely to send letters, holiday cards, and non-holiday greeting cards than were lower-income households.

The largest disparity between high- and low-income households is in the volume of non-holiday greeting cards sent. Households with incomes over $100,000 sent an average of 17 non-holiday greeting cards in FY 2007, compared to the 8 sent by households with incomes under $35,000.

There seems to be a direct relationship between household income and use of Internet greeting cards, which makes sense in light of the number of higher-income households with Internet service compared to lower-income households.

The number of letters and greeting cards sent varies across age groups (Fig. 3.2). Households where the head is 55 years or older sent more letters and holiday greeting cards through the mail (an average of 11 letters and 22 holiday greeting cards in 2007). They also sent an average of 15 non-holiday cards.

In comparison, households under the age of 35 sent an average of 8 letters and 10 holiday greeting cards in FY 2007, along with 10 non-holiday cards. Younger households (under 35 years old) sent about 23 percent more (12) Internet cards than traditional, mailed non-holiday greeting cards, while households whose heads are 55 or over sent less than half as many Internet cards (6) as they sent traditional cards (15) through the mail.

The relationship between holiday greeting cards received and income is shown in Figure 3.3. Households with incomes between $65,000 and $100,000 received the greatest number of holiday greeting cards during FY 2007 (20.4) compared to FY 2006 when the highest income households received the most holiday cards (33.1). Households with incomes less than $35,000 received more holiday cards in 2007 than in 2005 or 2006, while all other income levels received fewer holiday cards.

When examined by age, the number of holiday greeting cards received decreased since 2005 for all age categories, although the numbers spiked a bit in FY 2006 for the top and bottom income groups.

Households where the head of household is age 55 or older received the largest average number of holiday greeting cards – an average of 22.4 pieces in 2007 – yet that number decreased 34 percent from 2006 (34.1 pieces).

Figure 3.3:
: Holiday Greetings Received by Age and Income, FY 2005, 2006 and 2007 (Pieces per Household per Year)

Household Income (Thousands)	2005	2006	2007
Under $35	10.5	14.2	17.1
$35 to $65	18.5	26.1	17.1
$65 to $100	25.5	21.8	20.4
Over $100	23.8	33.1	18.2
Age	2005	2006	2007
Under 35	9.9	10.9	9.8
35 to 54	20.9	19.5	19.3
Over 55	23.2	34.1	22.4

Source: HDS Diary data, Diary Sample only, FY 2005, 2006 and 2007.
Note: 2006 Sent volumes were revised due to an understated adjustment factor.

As shown in Table 3.11, households with Internet access (including both broadband and dial-up) receive more letters and non-holiday greeting cards, compared to households without Internet access.

In examining household Internet use, we find that 75 percent of all persons who have Internet access send at least one personal e-mail during a typical day and 84 percent receive at least one e-mail. Figure 3.4 shows the number of personal e-mails sent and received in a typical day by those that have used e-mail in the past 12 months.

Table 3.11:
: Personal Correspondence by Type of Internet Access

(Pieces per Household per Week)

Correspondence Type	No Internet Access	Dial-up	Broadband
Personal Letters	.16	.17	.20
Holiday Greeting Cards	.33	.44	.33
Non-Holiday Greeting Cards	.20	.23	.26
Total	.69	.85	.79

Source: HDS Diary Sample FY 2007.

Figure 3.4: Daily Personal E-mails Sent and Received (Percent of E-mail Users)

Number of Daily Personal Emails	Sent	Received
0	25%	16%
1 to 3	46%	31%
4 to 6	17%	22%
7 to 10	7%	13%
11 or more	6%	18%

Source: HDS Recruitment Sample, FY 2007.

Business Correspondence

Households and businesses exchange many types of mail, including bill payment, statements and advertising–which are discussed in Chapters 4 and 5. This section of the report provides data on correspondence types between households and businesses.

Table 3.12 outlines volumes by correspondence type for 2005 through 2007. Correspondence received from the non-household sector accounts for 47 percent of total correspondence volumes. Invitations and announcements comprise the largest correspondence volumes from nonhouseholds (3.1 billion).

Table 3.12: Business Correspondence Type (Sent and Received) by Sector (Millions of Pieces)

Business Correspondence Type	2005	2006	2007	Change, 2005-2007
Business/Government/Social Received by Households
Invitation/Announcement	4,161	3,264	3,121	-25.0%
Holiday Greeting from Business	500	421	382	-23.7%
Other Business/Government	1,667	1,343	852	-48.9%
Total Business Received	6,328	5,029	4,355	-31.2%
Announcement	1,827	1,761	2,208	20.9%
Other Social	491	437	333	-32.2%
Total Social Received	2,318	2,198	2,541	9.6%
Total Received	8,647	7,227	6,896	-20.2%
Business/Government/Social Sent by Households
Inquiry	549	583	560	1.9%
Other Business/Government	1,153	1,078	1,118	-3.0%
Total Business Sent	1,702	1,662	1,678	-1.4%
Letter	178	124	138	-22.4%
Inquiry	60	44	81	35.5%
Other Social	179	205	235	31.3%
Total Social Sent (Social includes social, political & nonprofit.)	417	372	454	9.0%
Total Sent	2,119	2,034	2,132	0.6%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes: 2006 Sent volumes were revised due to an understated adjustment factor. Totals may not sum due to rounding.

Chapter 4: Transactions

Introduction

This chapter examines the volumes and trends in transactions mail: the bills, statements, payments, donations, rebates, and orders sent and received by households. Information is presented on household bill payment trends, which is of particular interest due to the availability of electronic alternatives to traditional mail payments.

Transactions Mail Volume

Transactions sent and received comprise about 26 percent of all household mail volumes (as seen in Table E-2) and 54 percent of household First-Class Mail; as such, they are an important part of the mailstream. Although many businesses now use electronic funds transfer (EFT) or other electronic technologies to settle transactions, households still pay a majority of their recurring bills through the Postal Service. As the Internet becomes more ubiquitous, however, the movement towards consumer electronic bill presentment and payment (EBPP) continues to gain momentum.

Transactions comprise 54 percent of Household First-Class Mail.

As Table 4.1 shows, the total transactions volume increased 1.3 percent between 2005 and 2007. Increases in confirmations, statement presentments and bills contributed to the growth, partly offset by a 5.6 percent decrease in bill payments. Electronic diversion continues to erode the volume of mail payments in favor of online payments, automatic deductions from bank accounts and other electronic methods of bill payment. As a result, the share of bills paid by mail dropped from 25.3 percent of total mail transactions in 2005 to 23.6 percent in 2007. The growth in non-mail methods of payments is also evident from Table 4.1, which shows that bills paid by mail are much lower than total bills received.

Table 4.1: Transactions Mail Sent and Received

Transaction Type	Volume (Millions of Pieces)			Change, 2005-2007
Transaction Type	2005	2006	2007	Change, 2005-2007
Business
Bills	18,656	19,080	18,788	.7%
Bill Payments	10,809	9,949	10,202	-5.6%
Statements	6,594	6,920	7,133	8.2%
Confirmations	2,518	2,738	3,242	28.7%
Payments (to HH)	1,437	1,439	1,418	-1.3%
Orders	769	612	560	-27.2%
Rebates	206	173	169	-17.9%
Total Business	40,990	40,911	41,512	1.3%
Social/Charitable
Requests for Donation	636	708	733	15.2%
Donations	560	524	550	-1.9%
Bill	184	212	194	5.6%
Confirmations	324	355	273	-15.7%
Total Social/Charitable	1,704	1,798	1,749	2.7%
Total Transactions	42,694	42,709	43,261	1.3%

Table 4.1: Transactions Mail Sent and Received (cont.)

Transaction Type	Pieces per Household per Week			Share of 2007 Total
Transaction Type	2005	2006	2007	Share of 2007 Total
Business
Bills	3.2	3.2	3.1	43.4%
Bill Payments	1.8	1.7	1.7	23.6%
Statements	1.1	1.2	1.2	16.5%
Confirmations	.4	.5	.5	7.5%
Payments (to HH)	.2	.2	.2	3.3%
Orders	.1	.1	.1	1.3%
Rebates	0	0	0	.4%
Total Business	7.0	6.9	6.9	96.0%
Social/Charitable
Requests for Donation	.1	.1	.1	1.7%
Donations	.1	.1	.1	1.3%
Bill	0	0	0	.4%
Confirmations	.1	.1	0	.6%
Total Social/Charitable	.3	.3	.3	4.0%
Total Transactions	7.3	7.2	7.2	100%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Note: 2006 Sent volumes were revised due to an understated adjustment factor in the 2006 HDS.

Tables 4.4 and 4.5 also show that age has a strong effect on transactions mail, independent of income. Across all income categories, younger households send and receive less transactions mail. In part, this is due to the fact that such households are less likely to own their home and have fewer insurance policies, investments, and the like. However, it is also the case that these households are more active users of electronic alternatives to traditionally mail-based transactions. This is especially evident for transactions mail sent (primarily bill payments) where households under 35 years old sent only about 48 percent as much mail as older households.

Across all income categories, younger households send and receive less transactions mail.

Table 4.4:
: Transactions Mail Received by Income and Age

(Pieces per Household per Week)

Household Income (Thousands)	Age of Head of Household			Average
Household Income (Thousands)	Under 35	35 to 54	Over 55	Average
Under $35	2.8	3.7	3.9	3.6
$35 to $65	4.5	5.5	5.4	5.2
$65 to $100	5.3	6.1	6.6	6.1
Over $100	6.4	6.9	7.8	7.0
Average	4.3	5.7	5.4	5.3

Source: HDS Diary Sample, FY 2007.

Table 4.5:
: Transactions Mail Sent by Income and Age

(Pieces per Household per Week)

Household Income (Thousands)	Age of Head of Household			Average
Household Income (Thousands)	Under 35	35 to 54	Over 55	Average
Under $35	.9	1.3	1.8	1.4
$35 to $65	1.4	1.9	2.3	1.9
$65 to $100	1.5	2.2	2.7	2.2
Over $100	1.0	1.9	2.9	2.0
Average	1.2	1.9	2.3	1.9

Source: HDS Diary Sample, FY 2007.

Household Size

In terms of household size, Table 4.6 shows that going from a one-person household to a two-person household adds 1.8 pieces of transaction mail per week received and .4 pieces per week sent, but larger household size has little effect on volume.

Table 4.6:
: Transactions Mail Received and Sent by Household Size

(Pieces per Household per Week)

Household Size	Received	Sent
One person	3.4	1.6
Two	5.2	2.0
Three	5.9	2.0
Four	6.0	1.9
Five or more	6.2	1.7
Average	5.3	1.9

Source: HDS Diary Sample, FY 2007.

For transactions mail received, Table 4.7 shows that each additional adult adds about 1.5 pieces (on average) of mail received per week. However, one additional adult generates only .4 pieces of extra mail sent and further changes have little effect on volume.

Table 4.7:
Transactions Mail Received and Sent by Number of Adults in Household

(Pieces per Household per Week)

Number of Adults in HH	Received	Sent
One	3.6	1.5
Two	5.5	1.9
Three or more	6.6	2.1
Average	5.3	1.9

Source: HDS Diary Sample, FY 2007.

Internet Access

Table 4.8 shows that households with Internet access (Broadband or Dial-up) receive more transactions mail than households without Internet service, even though having an Internet connection at home should make transactions more susceptible to electronic diversion. As shown in Table 4.9, this apparent contradiction is explained in large measure through the fact that household Internet access is strongly correlated to income and education.

In Table 4.8, we also see that while the number of transactions sent by households with Broadband is higher than for households without access (mainly due to the higher income of households with Internet access), it is also lower than the number for Dial-up users. This is an indication that diversion of bill payments and other transactions is likely to increase as more households upgrade to Broadband, as a higher connection speed may lead to easier and faster online transactions.

Table 4.8:
: Transactions Mail Received and Sent by Internet Access

(Pieces per Household per Week)

Type of Internet Access	Received	Sent
Broadband	5.7	1.8
Dial-up	5.5	2.2
None	4.1	1.7
Average	5.3	1.9

Source: HDS Diary Sample, FY 2007.

Table 4.9:
Income and Education by Type of Internet Access

(Pieces per Household per Week)

Type of Internet Access	Median Income	% w/ College Degree
Broadband	77,880	39%
Dial-up	56,671	24%
None	36,033	11%

Source: HDS Diary Sample, FY 2007.

Bill Payment

The average number of bills paid per month per household in 2007 was 12.1 – slightly higher than in 2005 and 2006 (11.9 and 11.8, respectively). Households use a variety of methods to pay bills. Historically, they have been paid in person, via phone, or by mail. In the past decade, emerging technologies provided additional bill receipt and payment options. The most important of these are automatic deduction and on-line bill payment.

The Household Diary Study measures bill payment by all of these methods.

Table 4.10 shows the percentage of households who pay bills by each method and the average number of bills paid per month by each method. About 92 percent of households pay at least one bill by mail, and the average number paid by mail per household is 7.5 per month, down 6 percent from 2005 when the average number of bills paid per month by mail was 8.0. Other popular bill payment methods are automatic deduction from bank account (53 percent of households), in-person (31 percent) and, more recently, using the Internet (30%).

However, the number of actual bills paid by these methods is relatively small (an average of 1.4, 0.7 and 1.9 pieces per month, respectively).

Notably, households reported paying more monthly bills by electronic methods only in 2007 than in 2005. In particular, online payments increased rather quickly, growing 46 percent since 2005 and 19 percent since 2006. As a result, in 2007, almost as many payments are made using the Internet as by all other electronic methods combined (1.9 compared to 2.1).

Since 2005, the average number of bills
paid by Internet increased by 46 percent.

Unsurprisingly, the number of bills paid per month is positively related to household income. Households with incomes over $100,000 paid an average of almost sixteen bills per month in FY 2007, compared to the nine bills paid by households with incomes under $35,000.

Age has a slightly different relationship with bill payment levels in that younger households (under age 35) and older households (age 55+) pay fewer bills than households where the head of household is between 35 and 54.

More of the bills that younger households pay are paid electronically, which for purposes of this chapter combines payments made via Internet, automatic deduction from bank and other (e.g., automatic charge to credit card and payment by ATM). Figure 4.4 shows that the younger the head of a household is, the more likely it is that that household will pay bills electronically. Younger households pay a little less than 50 percent of their bills by mail, and about 45 percent electronically. Compare that to older households who pay almost 70 percent of bills by mail, and only about 26 percent electronically. The greatest divergence is in Internet bill paying, where younger households pay 27 percent of bills using the Internet, while older households pay 10 percent using this method.

Figure 4.4:
: Bill Payment Method by Age (Percent Bills Paid per Month per Household)

Age	Mail	In-Person	Internet	Automatic Deduction	Other Electronic
Under 35	52%	10%	29%	12%	8%
35 to 54	74%	8%	27%	14%	8%
Over 55	80%	6%	11%	14%	5%

Source: HDS Recruitment Sample, FY 2007.
Note: Other Electronic includes telephone.

Bills and Statements Received

Table 4.12 shows the overall volume of bills and statements received. The largest volumes of bills originate from credit card companies (3.6 billion), utility companies (2.6 billion), insurance companies (2.3 billion) and telephone companies (2.1 billion). Statements received are predominantly sent by the financial sector, including banks, insurance companies, and other financial institutions. Overall, the volume of statements received by households from the financial sector increased just over 8 percent since 2005. This year, U.S. households received 6.5 billion statements from financial institutions. In 2005, that figure was 5.9 billion.

About 44 percent of First Class Mail received by households is bills and statements. In FY 2007, households received 18.8 billion bills, up from 18.7 billion in 2005, but since the number of households increased, the average number of bills per household has remained about constant. The number of statements received through the mail in FY 2007 (7.1 billion) increased 8 percent since 2005. As shown in Figure 4.5, between 2005 and 2007, the number of statements received by mail increased in households with an income of $100,000 or more. Households with incomes between $65,000 and $100,000 received .1 less statements per week, and households in the other income levels received about the same number of statements as in 2005.

Although the number of bills households receive through the mail is about constant on a per household basis, the number of bills received over the Internet is growing rapidly, albeit from a small base. Table 4.13 shows the average volume of bills received by mail and over the Internet.

Table 4.12: Bill and Statement Volumes by Industry

Industry	Volumes
Industry	Bills (Millions)	Statements (Millions)
Financial
Bank, S&L, Credit Union	1,498	3,964
Credit Card	3,601	—
Insurance Company	2,264	543
Real Estate/Mortgage	389	106
Other Financial	129	1,840
Total Financial	7,880	6,452
Merchants
Department Store	779	13
Publisher	481	8
Mail Order Company	213	3
Other Merchants	519	71
Total Merchants	1,992	94
Service
Telephone Company	2,112	14
Utility Company	2,638	19
Medical and Other Professional	2,072	152
Cable TV	885	5
Other Service	445	34
Total Service	8,152	223
Manufacturers	137	19
Government	532	312
Social/Nonprofit	7	—
Other/Don’t Know/Refused	87	33
Total – All Industries	18,788	7,133

Source: HDS Diary Sample, FY 2007.

Figure 4.5:
: Statements Received by Mail by Income (Statements per household per week)

Household Income (Thousands)	2005	2006	2007
Under $35	.7	.7	.7
$35 to $65	1.2	1.1	1.1
$65 to $100	1.4	1.5	1.4
Over $100	1.6	1.8	1.8

Source: HDS Diary Sample, FY 2005 through 2007.

Table 4.13:
: Average Monthly Bills Received by Method

Method	2005	2006	2007
Mail	13.76	13.93	13.50
Internet	.91	1.18	1.31
Total	14.67	15.10	14.81

Source: HDS Diary Sample, FY 2005 through 2007.
Notes:
Internet averages use HDS Recruitment Sample.

Chapter 5: Advertising Mail

Introduction

This chapter examines advertising mail, which is any advertising, promotional, or sales material sent through the Postal Service. Advertising mail can be sent as First-Class or Standard Mail.

The Advertising Market

According to McCann-Erickson, American businesses spent about $284 billion in 2007 advertising their products and services, a decrease of 0.4 percent from 2006. Of this total advertising spending, 21.5 percent was spent on direct mail.

In 2007, one fifth of total advertising dollars was spent on direct mail advertising.

Direct mail was the second leading media choice of advertisers in 2007, after television. Direct mail advertising spending increased 1.8 percent from 2006, outpacing the growth in all media categories, except for Internet and magazine spending, as shown in Table 5.1.

Table 5.1:
: U.S. Advertising Spending by Medium, 2005-2007

(Billions of Dollars)

Medium	2005	2006	2007	Percent Change 2006-2007
Direct Mail	$56.6	$59.9	$61.0	1.8%
Newspapers	$47.9	$47.7	$42.9	-10.0%
Television	$64.1	$66.2	$66.2	0.0%
Radio	$20.0	$19.6	$18.6	-5.2%
Magazines*	$12.9	$13.4	$13.7	2.0%
Internet	$7.9	$9.3	$10.9	17.2%
All Other	$66.6	$68.9	$70.5	2.3%
Total	$276.0	$285.1	$283.9	-0.4%

Source: McCann-Erickson – estimates.
Note: Totals may not sum due to rounding.
* Consumer magazines advertising only (business is in All Other)

Despite many changes to the U.S. economy over the past few years, direct mail continues to be one of the most popular advertising choices. It is a highly efficient and versatile method for communicating with consumers. Direct mail can be targeted to the interests of individual customers. It can be used both to locate new customers and maintain relationships with existing customers. Direct mail allows for a variety of different types of advertising: letters, postcards, catalogs, and free samples. It can be sent as First-Class or Standard Mail, allowing advertisers to trade off their interest in more timely, personalized First-Class mailings against cost savings from Standard Mail.

Importantly, the effectiveness of direct mail is readily measurable, more so than for any other media shown in Table 5.1. Businesses can track the response rate to a mailing far more precisely than for a television commercial or magazine advertisement. This feature alone gives advertising mail a key advantage over its competitors.

Figure 5.1 shows that direct mail’s share of total advertising spending has been on a strong upward trend for most of the past 16 years. Since 1999, the direct mail share has risen steadily reaching 21.5% percent in 2007. Direct mail has maintained its large ad share even with the introduction of new, fast growing ad markets such as the Internet.

Figure 5.1:
: Direct Mail as a Share of Total Advertising, 1990-2007 (Percent of Total Ad Spending)

Calendar Year
1990	18.0%
1991	19.1%
1992	19.0%
1993	19.3%
1994	19.4%
1995	19.9%
1996	19.3%
1997	19.3%
1998	19.1%
1999	18.6%
2000	19.0%
2001	19.2%
2002	19.4%
2003	19.7%
2004	19.8%
2005	20.5%
2006	21.0%
2007	21.5%

Source: U.S. Postal Service calculations based on McCann-Erickson WorldGroup data.

Advertising Mail Volumes

Households received 100 billion pieces of advertising mail in 2007. Tables 5.2 and 5.3 show lower levels of Standard Mail in 2007 compared to the previous two years due to overstated volumes in 2005 and 2006. Prior to 2007, detached address labels (approximately 3 billion pieces in 2006) were counted as separate pieces, resulting in double counting errors. As seen in Table 1.1, however, the trend for total Standard Mail (household and businesses) shows a continuous increase over the past few years. In 2007, advertising mail represented about 60 percent of all mail received by households.

Advertising mail represented 60 percent of all mail received by households in 2007.

Table 5.2 shows that First-Class advertising mail accounts for 16.9 billion pieces (17 percent) of all advertising mail received by households. Of this, 9.0 billion pieces are advertising only, while the other 7.9 billion pieces are secondary advertising, such as an advertisement enclosed with a bill. First-Class advertising mail volumes were adversely affected prior to 2005, primarily from diversion to Standard Mail advertising. However, in 2005 and 2006 it increased almost back to 2002 levels. In 2007 it resumed its fall, resulting in an 8 percent decrease from 2005.

On average, U.S. households each receive 16.7 pieces of advertising mail per week, 17 percent of which is First-Class advertising.

About 83 percent of all advertising mail received by households in 2007 was sent as Standard Mail, which equates to a total of 83.4 billion pieces.

As noted above, the trends in Tables 5.2 and 5.3 are distorted by errors in the volumes reported prior to 2007. However, data from RPW reports (which do not include these errors) indicate that overall advertising mail has grown steadily for the past three years. Most of the increase in Standard Mail advertising volumes is found in Regular and ECR mail. In 2007, households received an average of 11.6 Presorted Standard or Bulk Rate mail pieces per week. The strong growth in this class of Standard Mail advertising results from implementing only one postal rate increase in over five years, diversion from First Class Mail advertising, strong growth in Direct Mail advertising spending and a strong overall economy.

Standard Mail accounts for
83 percent of total advertising mail.

Table 5.2: Advertising Mail by Mail Classification

(Volume in Billions of Pieces)

Mail Classification	Volume (Billions of Pieces)			Growth, 2005-2007
Mail Classification	2005	2006	2007	Growth, 2005-2007
First-Class Advertising	18.4	18.0	16.9	-8.2%
Advertising Only	10.5	10.3	9.0	-14.3%
Secondary Advertising	7.8	7.7	7.9	.1%
Standard Mail	83.5	86.9	83.4	-.1%
Regular and ECR *	70.1	73.1	69.9	-.3%
Nonprofit	13.4	13.8	13.5	1.0%
Unsolicited Periodicals/Packages	.3	.2	.2	-26.8%
Total Advertising	102.2	105.1	100.5	-1.6%
Unaddressed Mail	15.6	17.8	12.6	-19.2%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
Totals may not sum due to rounding.
Unaddressed Mail is not included in totals.
* Prior to 2007, Detached Address Labels (approx. 3 billion in 2006) were counted as separate pieces, resulting in double counting errors.

Table 5.3: Advertising Mail by Mail Classification

(Pieces per Household per Week)

Mail Classification	Pieces per HH per Week			Share of Total
Mail Classification	2005	2006	2007	Share of Total
First-Class Advertising	3.1	3.0	2.8	17%
Advertising Only	1.8	1.7	1.5	9%
Secondary Advertising	1.3	1.3	1.3	8%
Standard Mail	14.2	14.6	13.8	83%
Regular and ECR*	11.9	12.3	11.6	70%
Nonprofit	2.3	2.3	2.2	13%
Unsolicited Periodicals/Packages	0	0	0	0%
Total Advertising	17.4	17.7	16.7	100%
Unaddressed Mail	2.6	3.0	2.1	N/A

Table 6.1:
: Periodical Type by Year

(Pieces per Household per Week)

Periodical Type	1987	2006	2007
Newspapers	.6	.2	.2
Daily	.2	.1	.1
Weekly	.3	.1	.1
Other	.1	0	0
Magazines	1.0	.8	.8
Weekly	.3	.2	.2
Monthly	.6	.6	.5
Other	.1	.1	.1
Unclassified	.1	.1	.1
Total Periodicals	1.7	1.1	1.1

Source: HDS Diary Sample, FY 1987, 2006 and 2007.
Note: Totals may not sum due to rounding.

Figure 6.3:
: Newspaper Circulation – 1970 to 2006 (Millions of Copies)

Calendar Year
1970	62.1
1971	62.2
1972	62.5
1973	63.1
1974	61.9
1975	60.7
1976	60.9
1977	61.5
1978	62.0
1979	62.2
1980	62.2
1981	61.4
1982	62.5
1983	62.6
1984	63.1
1985	62.8
1986	62.5
1987	62.8
1988	62.7
1989	62.6
1990	62.3
1991	60.7
1992	60.1
1993	59.8
1994	59.3
1995	58.2
1996	57.0
1997	56.7
1998	56.2
1999	56.0
2000	55.8
2001	55.6
2002	55.2
2003	55.2
2004	54.6
2005	53.4
2006	52.3

Source: Newspaper Association of America.

Figure 6.4:
: Daily Newspaper Readership – 1987 to 2007 (Percent of Population)

Calendar Year
1987	64.8%
1988	64.2%
1989	63.6%
1990	62.4%
1991	62.1%
1992	62.6%
1993	61.7%
1994	61.5%
1995	59.4%
1996	58.4%
1997	58.3%
1998	59.0%
1999	56.9%
2000	55.5%
2001	54.3%
2002	55.4%
2003	54.1%
2004	52.8%
2005	51.6%
2006	49.9%
2007	48.4%

Source: Newspaper Association of America.
Note: There was a change in methodology in 1998.

Directly contributing to newspaper volume declines are changes in daily readership levels. As shown above in Figure 6.4, the percentage of the U.S. population reading newspapers on any given day decreased from 65 percent in 1987 to only 48 percent in 2007.

Daily newspaper readership overall
has declined since 1987.

Declining newspaper readership and circulation are not the only contributors to the falling volume of newspapers received by households. With current technology and alternate delivery systems, national newspapers such as the Wall Street Journal, The New York Times, and USA Today deliver their papers to prime urban and suburban household customers before breakfast. Local printing/ distribution and morning delivery mean these copies no longer move through the mail.

Periodicals Mail and
Household Characteristics

Income, Education, and Age

Table 6.2 shows that as income and education increase, periodicals volume tends to increase. Households where the head householder has a college education receive the most periodicals, averaging 1.4 per week. Similarly, households with incomes over $100,000 get an average of almost two periodicals per week, double what households earning less than $35,000 receive.

Households with incomes over $100,000
receive twice as many periodicals as households earning less than $35,000.

Table 6.3 shows periodicals volume by age and income. The higher the income and age of the household, the higher the volume of periodicals received. For households whose heads are under 34 and with incomes less than $35,000, the average is only 0.4 pieces per week. Households with income over $100,000 and whose heads are over 55 receive the most periodicals.

Table 6.2:
: Periodicals by Income and Education

(Pieces per Household per Week)

Household Income (Thousands)	Educational Attainment of Head of Household				Average
Household Income (Thousands)	Less than High School	High School Graduate	Some College or Technical School	College Graduate	Average
Under $35	.7	.9	.8	.8	.8
$35 to $65	.7	1.0	.9	1.1	1.0
$65 to $100	.9	1.0	1.1	1.4	1.2
Over $100	1.6	1.0	1.5	1.8	1.6
Average	.7	1.0	1.0	1.4	1.1

Source: HDS Diary Sample, FY 2007.

Table 6.3:
: Periodicals by Income and Age

(Pieces per Household per Week)

Household Income (Thousands)	Age of Head of Household			Average
Household Income (Thousands)	Under 34	35 to 54	Over 55	Average
Under $35	.4	.5	1.2	.8
$35 to $65	.5	1.0	1.3	1.0
$65 to $100	.9	1.0	1.7	1.2
Over $100	1.0	1.6	2.0	1.6
Average	.6	1.0	1.4	1.1

Source: HDS Diary Sample, FY 2007.

Chapter 7: Packages

Introduction

This chapter discusses packages sent and received by households, regardless of the carrier. Packages can be mailed via the U.S. Postal Service at a variety of rates, for example, documents are usually sent as First-Class Mail, Priority Mail, or Express Mail while product samples are generally Standard Mail. Merchandise and goods can be any of these classes, or any of the Package Services subclasses, including Parcel Post, Bound Printed Matter and Media Mail.

The Package Market

The package delivery market is an important and growing segment of the economy. From 1998 to 2007, package volume grew from 7.5 billion pieces to 8.5 billion pieces, averaging 1.4 percent growth per year. Package revenues increased from $43.3 billion to $62.1 billion over the same period, an average of four percent per year. Over that time, however, segments of the market performed differently.

There are three major segments of the package market:

· Overnight air,

· Two- and three-day air, and

· Ground.

The U.S. Postal Service is a major player in the two- and three-day air segment but provides services in all: Express Mail in the overnight segment, Priority and First-Class Mail in the two- and three-day segment, and Standard Mail and Package Services in the ground segment.

Table 7.1 shows the volume and growth rates of the three segments of the package delivery market. Between 1998 and 2000, the overall market grew consistently, driven by growth in the overnight and two-day and three-day air segments. This growth was largely due to expansion of the services offered by United Parcel Service (UPS) and Federal Express (FedEx). UPS began to push strongly into the overnight market, and both UPS and FedEx developed new two- and three-day offerings to compete with Priority Mail.

The 2001 recession led to declines in all segments of the package market, with the largest effect in the two-day and three-day air segment as customers shifted to time-guaranteed ground service in the face of hard economic times. The slow recovery in 2002 continued to adversely affect all segments of the package market, except for ground. Ground began to pick up in 2002 at the expense of the other segments. This pattern continued through 2004. As a result, the ground segment accounts for more of the package market by volume than it has at any point over the last ten years (see Figure 7.1). In 2005 and 2006, the recovering economy boosted all segments of the package market. In 2007, however, the instability of fuel prices contributed to decreases in both overnight and two- and three –day service volumes, while improved service resulted in continued growth for ground volumes.

From 1997 to 2007, package volume grew from 7.5 billion to 8.5 billion pieces.

While many carriers serve the package delivery market; FedEx, UPS, the United States Postal Service, and DHL are the larger players. DHL’s recent push in all market segments intensified competition in an already aggressive market. As seen in Table 7.2, the Postal Service lost market share in every segment over the last ten years. In part, this is a result of service enhancements made by competitors, such as the introduction of day-certain ground delivery. Competitors also include insurance and tracking services for all packages as part of the base shipping price, while the Postal Service charges extra fees for some of these services.

The Postal Service also serves a different niche in the package market than its competitors. Much more of the Postal Service’s volume consists of relatively lightweight, low-revenue parcels delivered to households (see Tables 7.3 through 7.5). This is true even in the two- and three-day air segment, where the Postal Service carries the lion’s share of the parcels.

Table 7.1:
: Total Package Market Volume Growth

(Units in Millions)

Fiscal Year	Overnight Air		Two- & Three- Day Air		Ground		Total
Fiscal Year	Volume	Percent Growth	Volume	Percent Growth	Volume	Percent Growth	Volume	Percent Growth
1998	1,058	7.4%	2,123	8.2%	4,266	3.8%	7,447	5.5%
1999	1,115	5.4%	2,161	1.8%	4,335	1.6%	7,611	2.2%
2000	1,160	4.0%	2,225	3.0%	4,571	5.4%	7,956	4.5%
2001	1,126	-2.9%	2,135	-4.1%	4,555	-.4%	7,815	-1.8%
2002	1,063	-5.6%	1,980	-7.3%	4,578	.5%	7,621	-2.5%
2003	1,062	-.1%	1,842	-7.0%	4,737	3.5%	7,642	.3%
2004	1,044	-1.7%	1,873	1.7%	4,931	4.1%	7,848	2.7%
2005	1,057	1.2%	1,931	3.1%	5,105	3.5%	8,093	3.1%
2006	1,075	1.7%	2,009	4.0%	5,254	2.9%	8,338	3.0%
2007	1,051	-1.8%	1,966	-2.2%	5,438	3.5%	8,455	1.5%

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Figure 7.1:
: Package Delivery Market Segment Share (Percent of Package Volume)

Postal Fiscal Year	Overnight Air	Two- & Three- Day Air	Ground
1998	14%	29%	57%
1999	15%	28%	57%
2000	15%	28%	58%
2001	14%	27%	58%
2002	14%	26%	60%
2003	14%	24%	62%
2004	13%	24%	63%
2005	13%	24%	63%
2006	13%	24%	63%
2007	12%	23%	64%

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Table 7.2:
: Postal Service's Volume Market Share

Fiscal Year	Overnight Air	Two- & Three- Day Air	Ground
1998	6%	76%	31%
1999	6%	76%	31%
2000	6%	75%	31%
2001	6%	75%	31%
2002	6%	74%	31%
2003	5%	71%	31%
2004	5%	71%	29%
2005	5%	72%	29%
2006	5%	73%	27%
2007	5%	73%	27%

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Table 7.3:
: FY 2007 Overnight Air Segment Statistics

	Market Share (Volume)	Average Revenue per Piece	Weight per Piece (Pounds)
FedEx	45%	$17.68	6.6
UPS	30%	$21.00	7.9
DHL	18%	$11.11	3.9
Express Mail	5%	$17.36	1.0
Other	19%	$31.55	10.0

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Table 7.4:
: FY 2007 Two- and Three-Day Air Segment Statistics

	Market Share (Volume)	Average Revenue per Piece	Weight per Piece (Pounds)
FedEx	12%	$12.59	9.5
UPS	13%	$13.58	9.9
DHL	3%	$8.60	5.5
First-Class & Priority Mail	73%	$4.27	1.4
Other	0%	$21.60	20.6

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Table 7.5:
: FY 2007 Ground Segment Statistics

	Market Share (Volume)	Average Revenue per Piece	Weight per Piece (Pounds)
FedEx	15%	$7.29	14.8
UPS	54%	$7.08	11.9
DHL	2%	$5.88	10.6
Package Services & Standard Mail	27%	$1.69	2.1
Other	2%	$7.43	5.0

Source: UPS, FedEx and U.S. Postal Service data, Colography Group.

Postal Service Package Volume

Compared to other mail, like letters and flats, the number of packages captured in the Household Diary Study is small, as most people do not receive packages on a regular basis. The interpretation of the results should be conducted with this in mind.

Postal Service package volume sent and received by households fell 2% in FY 2007 after increasing 8% in FY 2006. However, when sent volumes are isolated, households sent 10 percent more packages in 2007 than in 2006, increasing their use of both First-Class and Priority Mail Package Services.

Households received 2.5 billion packages in FY 2007 and sent 742 million, as seen in Table 7.6. When the combined volumes are compared to FY 2005, First-Class, Expedited (Priority and Express) and Package Services sent by households increased by 46 percent in FY 2007. First-Class, Expedited and Package Services received by households, when combined, were relatively flat compared to FY 2005. Expedited volume increased up through 2005 due to an improving economy, constant rates and ease of use. In FY 2007, Expedited fell mainly as a result of back-to-back rate increases in January 2006 and May 2007.

Table 7.6:
: Postal Service Sent and Received Packages, FY 2005, 2006 and FY 2007

(Units in Millions)

Mail Classification	Volume (Millions of Pieces)
	2005		2006		2007
	Sent	Received	Sent	Received	Sent	Received
First-Class	195	626	352	869	445	974
Expedited Mail	172	477	183	489	150	302
Standard Mail	—	802	—	674	—	653
Package Services	121	601	116	513	108	527
Unclassified	23	71	23	115	39	71
Total Packages	510	2,577	674	2,661	742	2,528
Mail Classification	Percent of Pieces
	2005		2006		2007
	Sent	Received	Sent	Received	Sent	Received
First-Class	38%	24%	52%	33%	60%	39%
Expedited Mail	34%	18%	27%	18%	20%	12%
Standard Mail	—	31%	—	25%	—	26%
Package Services	24%	23%	17%	19%	15%	21%
Unclassified	4%	3%	3%	4%	5%	3%
Total Packages	100%	100%	100%	100%	100%	100%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
: First-Class Packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received from Netflix, Blockbuster, etc.,
reported in First- Class Mail letters in Tables E.1, 1.5 and 1.6.
Percentages may not sum to 100 due to rounding.
Expedited includes Priority Mail and Express Mail.
Totals include .2 billion pieces of household-to-household packages that are counted in both sent and received.

Household Size

The Household Diary Study shows that larger households tend to receive and send more packages than smaller households, as shown in Table 7.11. This, however, does not hold true for households with four or more members and is probably due to the likelihood that more children are present in very large households.

Table 7.11:
: Postal Service Received and Sent Packages
by Size of Household

(Pieces per Household per Week)

Household Size	Received	Sent
One person	.32	.09
Two	.44	.14
Three	.50	.16
Four	.38	.09
Five or more	.42	.10
Average	.42	.12

Source: HDS Diary Sample, FY 2007.

Table 7.12:
: Postal Service Received and Sent Packages
by Number of Adults in Household

(Pieces per Household per Week)

Number of Adults	Received	Sent
One	.32	.09
Two	.44	.13
Three or more	.47	.14
Average	.42	.12

Source: HDS Diary Sample, FY 2007.

Internet Access

Access to the Internet seems to play an important part in determining the number of packages sent and received by households. Table 7.13 shows the packages sent and received by households with Internet access and households without. In FY 2007, households with broadband Internet access sent over five times as many and received almost double the number of packages sent by households without Internet access. These relationships probably reflect the correlation between income, education and Internet access.

In FY 2007, households with Internet access sent and received more packages than households without Internet access.

Table 7.13:
: Received and Sent Packages
by Household Internet Access

(Pieces per Household per Week)

Type of Internet Access	Received	Sent
Broadband	.49	.16
Dial-up	.41	.12
None	.28	.03
Average	.42	.12

Source: HDS Diary Sample, FY 2007.

Household Package Contents

As shown in Table 7.14, packages received by households most often contain music and videos, books, clothes and pharmaceuticals – a sign that online purchases and mail order retail are primary drivers of household package volume. In fact, online purchases have contributed to a significant growth in music/video contents received.

This type of content increased by more than any other type, growing from 14 percent of all content types in 2005 to 24 percent in 2007, mostly due to volumes generated by video rental outfits like Netflix and Blockbuster.

Households most often send music and videos, clothes, books, and toys. Primarily, this is due to the fact that so many household packages are sent in the holiday season, but it may also be evidence of the growing use of online sales and auction portals, such as eBay.

Table 7.14:
: Contents of Postal Service Sent and Received Packages

Contents	Volume (Millions of Pieces)
	2005		2006		2007
	Sent	Received	Sent	Received	Sent	Received
Music/Video	100	365	237	586	359	595
Clothing	75	183	71	173	119	203
Computer Hard- and Software	10	207	12	129	16	30
Books	41	379	38	290	49	343
Pharmaceuticals/Contacts	4	222	1	245	7	293
Checkbooks	1	135	2	90	2	80
Food Products	14	39	16	51	30	68
Toys	23	59	28	53	62	57
Electronic Equipment	14	45	15	42	17	53
Travel Products and Information	8	29	8	42	12	50
Sporting Goods	2	31	7	16	4	28
Telecommunications	5	20	4	5	6	11
Footwear/Shoes	3	21	4	21	6	21
Other Contents	247	531	271	533	131	564
Total Packages	510	2,577	674	2,661	742	2,528

Table 7.14:
: Contents of Postal Service Sent and Received Packages (cont.)

Contents	Percent of Pieces
	2005		2006		2007
	Sent	Received	Sent	Received	Sent	Received
Music/Video	20%	14%	35%	22%	48%	24%
Clothing	15%	7%	11%	6%	16%	8%
Computer Hard- and Software	2%	8%	2%	5%	2%	1%
Books	8%	15%	6%	11%	7%	14%
Pharmaceuticals/Contacts	1%	9%	0%	9%	1%	12%
Checkbooks	0%	5%	0%	3%	0%	3%
Food Products	3%	2%	2%	2%	4%	3%
Toys	5%	2%	4%	2%	8%	2%
Electronic Equipment	3%	2%	2%	2%	2%	2%
Travel Products and Information	2%	1%	1%	2%	2%	2%
Sporting Goods	0%	1%	1%	1%	1%	1%
Telecommunications	1%	1%	1%	0%	1%	0%
Footwear/Shoes	1%	1%	1%	1%	1%	1%
Other Contents	48%	21%	40%	20%	18%	22%
Total Packages	100%	100%	100%	100%	100%	100%

Source: HDS Diary Sample, FY 2005, 2006 and 2007.
Notes:
FY 2005 and 2006 did not include “Contents” for Expedited Sent; Total Expedited Sent was added to “Other Contents” in Sent totals.
Contents questions are multiple response; total packages does not include multiple contents and, as such, does not equal the sum for each column.
Does not include contents for which no answer was given (DK/RF).
Music/Video packages include 0.8 billion pieces of CD/DVD’s rentals sent to and received from Netflix, Blockbuster, etc., reported in
First- Class Mail letters in Tables E.1, 1.5 and 1.6.

Appendix B: Methodology

Study Design and Methodology

The U.S. Postal Service Household Diary Study (HDS), conducted by NuStats on behalf of the Demand Forecasting & Economic Analysis division of the Postal Service’s Finance Department, is a continuously fielded study that measures household mail volumes, mail uses and attitudes about the mail and advertising.

The HDS uses a two-stage survey design: Stage 1 is an interviewer-mediated household recruitment interview. Stage 2 is a self-completion mail diary [Appendix C contains the survey instruments]. The HDS uses a multi-mode approach to minimize response bias, improve data accuracy through efficient data checking and householder re-contacts, and to provide immediate telephone assistance to participants during their diary week.

Household Recruitment Interview

The household recruitment interview collects information on household and personal demographics, recall of mail sent and received, adoption and use of communications technologies, bill payment behavior, and attitudes towards advertising.

Mail Diary

The mail diary covers a seven-day period (Monday to Sunday) and collects information on the number of mail pieces received and sent, industry source, mail characteristics, and attitudes regarding mail received.

Sample Design

This section describes the household selection process for participation in the HDS. A sample is the representative subset of the survey population used to gain information about the entire population. The population of inference for the HDS is all U.S. households. The probability design ensures each household has an equal chance of selection.

The sample design allows projections of results to all U.S. households. The Postal Service provided an address sample that NuStats matched for known telephone listings. Generally, the study was conducted using telephone sampling for household selection and screening, followed by diaries mailed to eligible households and completed by each household unit. Households without telephones were contacted via the U.S. Mail. The sample design involves a systematic sample stratified by strata (or urban/rural location) and Census regions, ensuring even coverage across the United States.

A master national sample was specified and drawn by in-house sampling statisticians. The Postal Service drew the household probability sample from the national address database following NuStats specifications. The master list, sorted by zip code, was used to draw a systematic stratified sample. This sample was then tagged with variables indicating each housing unit’s geographic location in terms of Census region and stratum.

Sample was drawn for each of the four quarters based on known proportions of households within a Census region and urban or rural location. Census regions are defined by state. Urban and rural location is defined by county and metropolitan status as defined by the U.S. Census Bureau. The strata are defined by county as follows:

· Stratum 1: Counties that are part of the thirty largest metropolitan areas in the United States, defined by population, according to Census 2000 100 percent counts.

· Stratum 2: Counties that are part of metropolitan areas but are not in Stratum 1.

· Stratum 3: Counties that are not part of a metropolitan area.

Quarterly sample frames were then derived based on the amount of sample needed for each quarter, and sample was allocated to region and strata cells based on known proportions as indicated by Census 2000 counts of households.

The sample was continuously “fielded” throughout all 52 weeks of the year. Sample was released in a manner designed to recruit equal sample sizes for each diary week, resulting in a sample file of at least 5,200 households. Table B.1 below shows the distribution of recruited and completed households.

Table B.1:
: Sample by Postal Quarter

Quarter	Required Sample	Recruited Households	Completed Households
Quarter 1	1,300	2,067	1,302
Quarter 2	1,300	2,097	1,383
Quarter 3	1,300	2,021	1,370
Quarter 4	1,300	2,028	1,407
Total	5,200	8,213	5,462

Data Collection Method

The study uses a two-stage design in which households are recruited to participate in the diary study in a household interview (Stage 1) and recruited households complete a seven-day diary of mail received and sent (Stage 2).

Stage 1: Household Recruitment Interview

The main function of the household recruitment interview is to recruit households to participate in the diary study. In addition, the interview collects information on household and person demographics, recall of mail sent and received, adoption and use of communication technologies, bill payment behavior and attitudes towards advertising.

Households completed the recruitment interview via computer-assisted telephone interviewing (CATI) technology. The FY 2007 household interview consisted of 8,213 completed interviews with an adult member (age 18 or older) in the household. These respondents represented a cross-section of U.S. households by geography. The household interview contained 125 data items and took an average of 24 minutes to administer. The flow of the interview included the following elements:

· Introduction. Each interview began with an introduction and purpose of the interview. The interviewer also verified the respondent’s address.

· Technology adoption and use. Questions were asked about ownership and use of personal computers, fax machines, Internet, and other electronic communication. One battery of questions came from the Technology Augment survey, which was discontinued following the FY 2005 study.

· Mail volume recall. The respondent was asked to summarize how many personal letters, greeting cards, electronic greeting cards, and packages all members of the household have sent in a particular time period.

· Use of postal services. The use of post offices, post office boxes, and private mailing services was explored.

· Communication with non-US friends and relatives. If members of the households had any friends or relatives living overseas, they were asked about cards, letters, e-mails, telephone calls, and wire transfers sent.

· Bill payments. Bill payment volumes, methods, and timing were explored in depth.

· Periodicals. Summary volumes of magazines and newspapers received by the household were collected.

· Advertising. Descriptions of advertising received by the household as well as attitudes about the advertising, and orders placed because of it, were elicited.

· Online shopping. Respondents were asked about their online shopping habits, including questions about shipping methods.

· Financial accounts and credit cards. Respondents were asked to summarize the total accounts and credit cards held by the household.

· Household and person demographics. Demographic items included gender, age, marital status, employment status, educational attainment, race/ethnicity, household income, household wage earners, home ownership, residence tenure, and dwelling type.

The completion rate for the FY 2007 study (defined as the proportion of respondents who completed the diary portion relative to all recruited respondents) was 66.5 percent. This represents an increase from 63.2 percent in 2006. Most recruitment refusals took place prior to hearing who NuStats was and why the firm was calling. Refusal households that were later re-contacted cited time constraints and privacy concerns as reasons for not participating.

Stage 2: Mail Diary Package

Recruited households were sent mail diaries, instructions, and a toll-free “help” telephone number. The night before an assigned diary week began, NuStats made reminder calls to households to confirm receipt of the packet and answer any questions. If the packet was not received by this time, NuStats re-confirmed the address, assigned a new diary week, and re-sent the packet.

The diary package contained a Certificate of Appreciation, Instruction Booklet, and a photo-based “Quick Start” sheet. The Instruction Booklet provided information about the study, answers to frequently asked questions, instructions for filling out the diary, guidelines for sorting mail, and examples of mail markings.

The diary instrument was composed of two parts:

· The Question sheets. The Question sheets were color-coded by mail classification (e.g. First-Class Mail received, First-Class Mail sent, Standard, Bulk Rate, Nonprofit, etc.). Information collected about each mail classification included: type of mail piece (i.e. envelope, postcard, catalog), receiver zip code, sender zip code, mail classification, mail type, sender type, information about advertising enclosed and receiver reaction or responses to it, and timeliness of the mail piece arrival.

· Seven answer booklets, each specific to a day of the week. Each booklet was arranged by mail classification and color-coded to correspond to the question sheets.

Households were instructed to enclose pertinent information from each mail piece received to enable NuStats editors to verify or clarify quantity and classes of mail recorded in the diaries. NuStats uses a three-stage editing process to check the accuracy of the diary information recorded by each household. First, returned diary packets are culled for those that represented a reasonable attempt to complete the diary. Second, the diary information recorded for each day is checked to assure sufficient and logical answers as well as to verify recorded information against the mail markings returned in the package. In stage three, a second editor re-checks the diary information recorded for each day. This second edit functions as a quality control check to assure data accuracy. Completed diaries then receive a rating of 1 (little follow-up needed), 2 (follow-up call needed), or 3 (unusable).

During the editing process, correction callbacks were made to households to clarify information or to fill-in missing information. About three percent of returned diaries did not pass the edit checking process, and over half required some form of respondent re-contact to clarify or correct diary information.

Of the 8,213 households recruited to receive a diary package, 5,462 actually returned acceptable completed diaries (defined as containing data suitable for analysis) to NuStats for a completion rate of 66.5 percent.

Data Processing

Data Management

Data management entails processing the information resulting from the Household Interview and Mail Diaries, making it available for analysis, storing it and documenting it. Household interviews were conducted using CATI technology, where the questionnaire and relevant data checks were programmed into a master questionnaire that was used by all interviewers to administer the survey. Recorded data was extracted from the CATI software into a database management file.

Returned diary information was recorded (entered) in one of two methods, either traditional manual data entry or through optical scanning technology. A data entry program, pre-programmed with data check routines, captured approximately 50 percent of the diary data in a database management file. The remaining 50 percent were scanned using Teleform software. Once scanned, the data were translated into a database file that was easily appended to include the manually entered data.

After completion of data collection, editing and entry tasks, the survey data were contained in eleven data files. One data file contained the Household Interview data. The Mail Diary data were in ten files – one for each mail classification (First-Class Mail received, First-Class Mail sent, etc.). These files were all developed in SAS-PC.

The file variables are identified by variable name. For each file variable, the File Information contains:

· Label, which is a brief description of the variable;

· Measurement level, which specifies the level of measurement as scale (numeric data on an interval or ratio scale), ordinal, or nominal. Nominal and ordinal data can be either string (alphanumeric) or numeric;

· Value formats, which identify the response codes; and

· Column width and alignment.

Several SAS programming operations were necessary to put the Mail Diary data in the desired form for analysis. The structure for these programs was contained in a separate File Information document that accompanied the data delivery.

Various edit routines were used to check the consistency of the reported data and to identify reporting or entry errors. Routine edit checks were conducted to examine questionnaire responses for reasonableness and consistency across items. Routine checks included such items as:

· Response code range checks;

· Checks for proper data skips and patterns of answering questions consistent with prior answers;

· Checks for realistic responses (e.g., number of online purchases possible in one month); and

· Checks for high frequency of item non-response (missing data from question refusals).

When conducting these checks, data were compared against the actual survey forms or respondents were re-contacted. NuStats identified extreme values that were impossible or unlikely, and corrected inconsistent data when possible. For example, extremely high numbers of computers owned by a household were examined to determine whether they were legitimate or probable entry errors.

Some extreme/inconsistent data values unable to be corrected or verified were edited to missing values.

In addition, NuStats performed in-depth customized data checks to ensure data within each record of the Household Interview were logically consistent. For example, a respondent should report paying bills by Internet only if he/she also reports having Internet access. Customized checks were also used to ensure consistency between the Household Interview and Mail Diary data. For example, an addressee was identified as a child (under 18) in the diary only if the household also reported having a child in the Household Interview.

Raw variables, derived variables, and analytical programs were documented in a data documentation binder that accompanied the data delivery. Any information that could be directly or indirectly used to identify individual respondents, such as respondent names, addresses, or telephone numbers, were removed to protect respondent confidentiality and privacy. Such information is stored in a locked archival file.

Sample Demographic Profile (all counts unweighted),
Government Fiscal Year 2007

Table B.2:
: Annual Household Income by Recruitment / Retrieval Status

Annual Household Income	Recruited Households		Total	Sample Percent	Population Percent
Annual Household Income	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
Under $10,000	114	136	250	2.3	7.5
$10,000 - $14,999	124	104	228	2.5	5.9
$15,000 - $19,999	176	104	280	3.6	5.9
$20,000 - $24,999	233	133	366	4.8	5.9
$25,000 - $34,999	436	201	637	8.9	11.5
$35,000 - $49,999	640	311	951	13.1	14.5
$50,000 - $64,999	763	332	1095	15.6	11.9
$65,000 - $79,999	713	278	991	14.6	8.9
$80,000 - $99,999	610	264	874	12.5	8.6
$100,000 or more	1086	506	1592	22.2	19.2
Don't Know	64	69	133	N/A	N/A
Refused	503	313	816	N/A	N/A
Total	5,462	2,751	8,213	100.0	100.0

Notes:
Sample Percent based only on retrieved households that provided a response to the Household Income question.
Population percent based on US Census Bureau, Current Population Survey Annual Demographic File (March 2007).

Table B.3:
: Number of Adults in Household by Recruitment / Retrieval Status

Number of Adults in Household	Recruited Households		Total	Sample Percent	Population Percent
Number of Adults in Household	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
One	1,130	685	1,815	20.7	32.8
Two	3,520	1,542	5,062	64.4	52.7
Three	609	376	985	11.1	10.4
Four	164	106	270	3.0	3.2
Five or More	39	42	81	.7	.9
Total	5,462	2,751	8,213	100.0	100.0

Notes:
: Sample Percent based only on retrieved households.
Population percent based on US Census Bureau, Current Population Survey Annual Demographic File (March 2007).

Table B.4:
: Geographic Region by Recruitment / Retrieval Status

Geographic Region	Recruited Households		Total	Sample Percent	Population Percent
Geographic Region	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
Northeast	1,077	587	1,664	19.7	19.2
Midwest	1,370	594	1,964	25.1	23.4
South	1,820	1,047	2,867	33.3	36.0
West	1,195	523	1,718	21.9	21.3
Total	5,462	2,751	8,213	100.0	100.0

Notes:
Sample Percent based only on retrieved households.
Population percent based on US Census Bureau, Census 2000, Summary File 3, Table H6 (Occupied Housing Units).

Table B.5:
: Urban / Rural Location by Recruitment / Retrieval Status

Urban / Rural Location	Recruited Households		Total	Sample Percent	Population Percent
Urban / Rural Location	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
30 Largest Metro Areas	2,733	1,484	4,217	50.0	48.7
Other Metro Areas	1,632	814	2,446	29.9	29.9
Non-Metropolitan Areas	1,097	453	1,550	20.1	21.4
Total	5,462	2,751	8,213	100.0	100.0

Notes:
: Sample Percent based only on retrieved households.
Population percent based on US Census Bureau, Census 2000; Strata based on Metro Area Classification by County.

Table B.6:
: Age of Head of Household by Recruitment / Retrieval Status

Age of Head of Household	Recruited Households		Total	Sample Percent	Population Percent
Age of Head of Household	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
18 - 24	49	48	97	.9	5.6
25 - 44	1,354	781	2,135	24.9	36.5
45 - 64	2,480	1,143	3,623	45.7	37.5
65+	1,547	756	2,303	28.5	20.5
Refused	32	23	55	N/A	N/A
Total	5,462	2,751	8,213	100.0	100.0

Notes:
Sample Percent based only on retrieved households that provided a valid response.
Population percent based on US Census Bureau, Current Population Survey Annual Demographic File (March 2007).

Table B.7:
: Educational Attainment of Head of Household by Recruitment / Retrieval Status

Educational Attainment of Head of Household	Recruited Households		Total	Sample Percent	Population Percent
Educational Attainment of Head of Household	Retrieved	Not Retrieved	Total	Sample Percent	Population Percent
8th grade or less	75	88	163	1.4	5.1
Some high school	164	182	346	3.0	8.7
High school graduate	1,384	787	2,171	25.5	30.2
Some college	1,006	504	1510	18.5	18.3
Technical school graduate	211	108	319	3.9	4.7
College graduate	1,439	654	2,093	26.5	23.0
Postgraduate work	1,152	403	1,555	21.2	10.0
Refused	31	25	56	N/A	N/A
Total	5,462	2,751	8,213	100.0	100.0

Notes:
: Sample Percent based only on retrieved households that provided a valid response.
Population percent based on US Census Bureau, Current Population Survey Annual Demographic File (March 2007).

Data Weighting and Expansion

This section explains the methodology used for creating sampling and expansion weights for the FY 2007 Household Diary Study.

The FY 2007 HDS uses both weighting and expansion factors to 1) adjust the sample data to match population parameters and 2) expand mail volumes exhibited in the diary sample to all U.S. households.

Weighting Procedures – FY 2007 Recruitment

Sampling weights were produced separately for the households that participated in the recruitment phase of the FY 2007 HDS, and those that completed and returned a diary. There were two main weighting variables: Geography and Education. FY 2007 recruitment geographic weights were derived from sample households’ strata and region:

Strata: As mentioned previously, there are 3 strata. A household was classified within strata as residing in the top 30 metropolitan areas nationwide, any other metropolitan area, or a non-metropolitan area[1]. Table B.8 provides unweighted sample counts from FY 2007 recruitment data for strata:

Table B.8:
: HDS 2007 Recruitment Data: Urban/Rural Location

Urban / Rural Location	Household	Percent	Cumulative Percent
30 Largest Metro Areas	4,217	51.3	51.3
Other Metro Areas	2,446	29.8	81.1
Non-Metro Counties	1,550	18.9	100.0
Total	8,213	100.0

Regions: Households were classified by state. There are four mutually exclusive regions as defined by the U.S. Census Bureau (along with respective states):

Four Census Regions:

Northeast: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

South: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

West: Arizona, Alaska, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Table B.9:
: HDS 2007 Recruitment Data: Geographic Region

Geographic Region	Households	Percent	Cumulative Percent
Northeast	1,664	20.3	20.3
Midwest	1,964	23.9	44.2
South	2,867	34.9	79.1
West	1,718	20.9	100.0
Total	8,213	100.0

Strata/Regions: Table B.10 indicates the distribution of households from the FY 2007 recruitment sample within strata and regions.

Population parameters for the intersection of the three strata and four regions were based on 2000 Census counts of households by county. As Table B.10 shows, each county was grouped according to its location within these 12 mutually exclusive and collectively exhaustive geographic categories.

To calculate the weight for each strata/region interval, the population percentage was divided by the sample percentage. Geography weights appear in the last column to the right in Table B.11.

Table B.10:
: Distribution of Households within Strata and Region

Geographic Region	Stratum (Urban/Rural Location)			Total
Geographic Region	30 Largest Metro Areas	Other Metro Areas	Non-Metro Areas	Total
Northeast	1,175	328	161	1,664
Midwest	940	547	477	1,964
South	1,021	1180	666	2,867
West	1,081	391	246	1,718
Total	4,217	2,446	1,550	8,213

Table B.11:
: HDS 2007 Recruitment Data: Construction of Geographic Weight

Stratum	Geographic Region	Households (Population)	Percent	Households (Sample)	Percent	Weight
30 Largest Metro Areas	Northeast	13,512,686	13	1,175	14.3	.90
	Midwest	11,317,737	11	940	11.4	.94
	South	12,488,134	12	1,021	12.4	.95
	West	14,020,576	13	1,081	13.2	1.01
Other Metro Areas	Northeast	4,134,396	4	328	4.0	.98
	Midwest	6,617,353	6	547	6.7	.94
	South	15,769,481	15	1,180	14.4	1.04
	West	5,061,183	5	391	4.8	1.01
Non-Metro Areas	Northeast	2,638,540	3	161	2.0	1.28
	Midwest	6,799,442	6	477	5.8	1.11
	South	9,757,599	9	666	8.1	1.14
	West	3,362,974	3	246	3.0	1.06
Totals		105,480,101	100	8,213	100.0	1.00

Source: Household Population Estimates based on U.S. Census Bureau, 2000 Census.

Education: In addition to weighting for differences in geography between the sample and the population, an additional weight was created based on differences in the educational attainment of the head of household. For those households in which either more than one person was identified as the head of household or no individual was identified as the head of household, one was chosen based on the following sequence of criteria: 1) oldest male, 2) oldest female (if no male exists). For cases in which two candidates for the head of the household were of the same age, the respondent on the phone was chosen.

Known population parameters were based on weighted proportions derived from the U.S. Census Bureau’s Current Population Survey annual demographic file for March 2007. In cases where the head of household refused to provide his/her education level, an educational level was imputed based on the average educational level of like cases. There were 56 such cases in 2007; mean levels of educational attainment were based on geography (strata and regions), as well as age and income level, if provided.

Table B.12:
: HDS 2007 Recruitment Data: Construction of Educational Attainment Weight

Educational Attainment	Households (Population)	Percent	Households (Sample)	Percent	Weight
8^th Grade or Less	5,879,531	5	163	2.0	2.55
Some high school	10,127,996	9	346	4.2	2.07
High school graduate	35,006,983	30	2,171	26.4	1.14
Some college	21,287,851	18	1,555	18.9	.97
Technical school graduate	5,424,318	5	330	4.0	1.16
College graduate	26,660,091	23	2,093	25.5	.90
Post graduate work	11,624,665	10	1,555	18.9	.53
Totals	116,011,435	100	8,213	100.0	1.00

Note: Education responses include imputed “Don’t Know/Refused” answers.

Weighting Procedures – FY 2007 Diary Data

As mentioned above, 8,213 households participated in the recruitment phase of the FY 2007 HDS and 5,462 households completed usable diaries. Balancing weights for the FY 2007 HDS diary data were developed in the same way as for the recruitment data. An additional age weight was derived based on the age of the head of household using the following categories: 18-21, 22-24, 25-34, 35-44, 45-54, 55-64, 65-69, 70-74 and over 75 years old.

Other adjustments to weights used in the diary data included a quarterly adjustment, which accounted for variances in sampling across postal quarters. All component weights were multiplied together and normalized to ensure that the number of weighted cases equals the number of unweighted cases.

A final adjustment in the form of expansion factors was made to expand the sample to the level of total households in the United States at the time of data collection, which was 116.01 million. The number of households in the United States was divided into the number of households that participated in the diary portion of the survey. The resultant factor was applied to each household in the survey. The expansion factor was multiplied by the sampling weight and then multiplied by 52 (the number of calendar weeks in one year) to derive nationwide annual volume estimates from the sample data.

Expansion Factor

116,011,435 / 5,462 = 21,239.7

Component Weight:

Where Ps = population count in cohort and
Pt = total population count;
Ss = sample count in cohort and
St = total sample count.

[1] Metropolitan area is defined within the sample according to the official definition used by the U.S. Census Bureau, commonly referred to as Metropolitan Statistical Areas (MSAs). Metropolitan areas are defined as single- or multi-county areas. Non-metropolitan areas are counties that do not belong to a metropolitan area. Each sample county was assigned to a stratum according to its metropolitan status.

Mail Received (Pieces per HH per week)	Households (Millions)	Median Annual HH Income	HHs w/ Internet Access (Percent)	Annual Bills Paid (Millions)	Annual Bills Paid by Internet (Millions)	Mail Sent (Pieces per HH per week)
45 or more	20.5	$88,058	90%	3,704	855	5.5
36-44	16.1	$73,736	86%	2,637	540	4.3
30-35	15.4	$66,695	82%	2,371	442	3.8
24-29	18.2	$56,522	78%	2,587	477	3.1
18-23	18.2	$48,145	73%	2,453	429	3.1
12-17	15.2	$36,424	68%	1,957	259	2.3
Less than 12	12.4	$26,465	54%	1,341	136	1.9
Total	116.0	$57,477	77%	17,049	3,137	3.4

Class	Market (Billions of Pieces)
Class	Correspondence	Transactions	Advertising	Periodicals	Packages	Total
First Class Mail	14.6	43.3	16.9	—	1.3	68.3
Standard Mail	—	—	83.4*	—	.6	84.0
Periodicals	—	—	—	6.6	—	6.6
Priority Mail	—	—	—	—	.3	.3
Express Mail	—	—	—	—	.1	.1
Package Services	—	—	—	—	.7	.7
Total	14.6	43.3	100.3	6.6	3.1	160.0

	1981-1990	1991-2000	2001-2007
Total Mail Volume	4.6%	2.3%	.4%
Delivery Points	1.7%	1.5%	1.2%
Adult Population	1.5%	1.3%	1.0%
Households	1.4%	.9%	1.2%

Mail Received (Pieces per HH per week)	Households (Millions)	Educational Attainment of Head of Household
Mail Received (Pieces per HH per week)	Households (Millions)	Less than High School	High School Graduate	Some College or Technical School	College Graduate
45 or more	20.5	7%	22%	19%	52%
36-44	16.1	8%	28%	24%	40%
30-35	15.4	11%	28%	24%	37%
24-29	18.2	11%	31%	25%	33%
18-23	18.2	18%	35%	21%	25%
12-17	15.2	19%	35%	27%	19%
Less than 12	12.4	27%	34%	23%	16%
Total	116.0	14%	30%	23%	33%

Household Income (Thousands)	Educational Attainment of Head of Household				Average
Household Income (Thousands)	Less than High School	High School Graduate	Some College or Technical School	College Graduate	Average
Under $35	3.2	3.8	3.5	3.7	3.6
$35 to $65	4.6	5.2	5.2	5.3	5.2
$65 to $100	6.1	6.2	6.0	6.0	6.1
Over $100	6.2	7.3	6.8	7.1	7.0
Average	4.0	5.2	5.1	6.0	5.3

Bill Payment Method	2005	2006	2007
Bill Payment Method	Average Number of Bills Paid per Month	Average Number of Bills Paid per Month	Average Number of Bills Paid per Month	Share of Bills Paid	Percent of Households Using Method
Mail	8.0	7.4	7.5	61.9%	92.4%
Automatic Deduction	1.2	1.3	1.4	11.4%	53.0%
Internet	1.3	1.6	1.9	15.5%	30.1%
In-person	.8	.8	.7	5.8%	31.3%
Credit Card	.3	.4	.4	3.0%	20.7%
Telephone	.3	.3	.3	2.3%	12.6%
ATM	0	0	0	.1%	.7%
Total	11.9	11.8	12.1	100.0%	—

Bill Type	Percent of Household
	2005	2006	2007
Telephone	73%	69%	66%
Electric	68%	66%	66%
Credit Cards	65%	62%	62%
Insurance	61%	60%	60%
Cable / Satellite TV	55%	53%	55%
Natural Gas / Propane, etc	54%	54%	54%
Water / Sewer	49%	50%	50%
Medical	N/A	44%	50%
Taxes	N/A	N/A	43%
Cell Phone	N/A	41%	40%
Rent/Mortgage	38%	36%	35%
Internet Service	N/A	26%	29%
Car Payment	N/A	25%	25%
Other Loans	32%	23%	22%
Alimony / Child Support	N/A	N/A	1%

Household Income (Thousands)	Education of Head of Household				Average
Household Income (Thousands)	Less than High School	High School graduate	Some College or Technical School	College graduate	Average
Under $35	9.9	11.8	10.5	11.9	10.9
$35 to $65	12.7	14.6	14.9	17.0	15.1
$65 to $100	18.5	17.8	18.6	20.0	18.9
Over $100	14.3	22.4	22.2	25.2	24.0
Average	11.5	15.2	15.6	20.3	16.7

Sender Type	First-Class Mail	Standard Mail
Financial	6.7	17.9
Merchants	4.0	29.9
Services	4.6	10.9
Manufacturers	.5	1.5
Social	.7	13.8
Government	.3	1.4

Treatment of Standard Advertising Mail	Catalogs	Credit Cards	All Other
Read	47%	24%	45%
Looked at, Not Read	14%	21%	18%
Discarded	18%	48%	25%
Set Aside for Later	14%	2%	5%

Treatment of Standard Advertising Mail	0 to 7	8 to 10	11 to 12	13 to 15	16 to 17	More than 18
Usually Read	22%	14%	12%	14%	12%	10%
Read Some	28%	29%	38%	33%	33%	39%
Usually Scan	31%	39%	32%	35%	38%	34%
Usually Don’t Read	19%	18%	19%	18%	17%	17%

Response	First-Class	Standard
Yes	9%	11%
Maybe	10%	17%
No	65%	61%
No Answer	17%	12%

Household Income (Thousands)	Will Respond	Might Respond
Under $7	1.2	1.4
$7 to $9.9	1.1	1
$10 to $14.9	0.7	1.6
$15 to $19.9	0.9	1.3
$20 to $24.9	1	1.4
$25 to $34.9	1.1	1.5
$35 to $49.9	1.4	1.8
$50 to $64.9	1.5	2.1
$65 to $79.9	1.6	2.4
$80 to $99.9	1.7	3
$100 to $119.9	2	2.8
$120 to $149.9	2.2	3.2
Over $150	2.2	3.6

Postal Fiscal Year
1971	48.8
1972	47.9
1973	45.4
1974	44.2
1975	45.0
1976	43.6
1977	42.5
1978	42.5
1979	41.1
1980	44.9
1981	43.3
1982	41.0
1983	39.4
1984	40.3
1985	43.5
1986	44.0
1987	42.5
1988	42.6
1989	42.5
1990	42.7
1991	41.0
1992	40.2
1993	39.6
1994	38.8
1995	38.2
1996	37.6
1997	38.1
1998	37.4
1999	36.8
2000	36.7
2001	35.3
2002	33.7
2003	32.1
2004	31.1
2005	30.6
2006	30.1
2007	29.2

Calendar Year
1960	$23.86
1961	$23.85
1962	$23.37
1963	$24.25
1964	$25.25
1965	$26.47
1966	$27.49
1967	$26.19
1968	$25.62
1969	$25.32
1970	$22.84
1971	$22.79
1972	$22.71
1973	$21.43
1974	$20.23
1975	$17.83
1976	$20.38
1977	$22.93
1978	$25.46
1979	$26.25
1980	$25.55
1981	$25.95
1982	$25.44
1983	$27.67
1984	$30.80
1985	$30.97
1986	$30.97
1987	$31.51
1988	$32.69
1989	$34.51
1990	$33.26
1991	$30.42
1992	$31.48
1993	$31.93
1994	$33.24
1995	$34.89
1996	$35.54
1997	$37.65
1998	$39.42
1999	$41.76
2000	$43.73
2001	$37.90
2002	$36.54
2003	$36.84
2004	$38.00
2005	$38.27
2006	$38.37
2007	$37.80

Subscription Type	1987	2006	2007
Paid	49%	45%	45%
Free (ordered)	4%	7%	7%
Gift	4%	3%	4%
Free (not ordered)	10%	31%	32%
Other	3%	1%	1%

Sender Type	Pieces per Household per Week	Percent of Periodicals Received by HH
Commercial Organization	.81	74%
Professional Organization	.12	10%
Religious Organization	.05	5%
Educational Organization	.06	5%
Union	.02	1%
Charitable Organization	.01	1%
Veterans’ Organization	.01	1%
Unclassified	.03	2%
Total	1.10	100%

Income Group	1978	1987	1995	2007
Lower Third	1.4	1.0	0.9	0.8
Middle Third	2.0	1.6	1.4	1.0
Highest Third	3.5	2.4	1.6	1.4

Postal Classification	Destination Adjustment Factor	Household-to-Household	Household-to-Nonhousehold
First-Class Letters & Flats	.93	1.10	1.24
Standard Regular Letters & Flats	.91	N/A	N/A
Standard Non-Profit Letters & Flats	.91	N/A	N/A
Package Services	.83	N/A	N/A
Expedited	.71	N/A	N/A
Periodicals	.83	N/A	N/A