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 2011 report covers Government Fiscal Year 2011, with comparisons to 2009, 2010, and other years, as appropriate.

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

In 2011, U.S. households received 127.5 billion pieces of mail, and sent 16.1 billion, as seen in Table E.1. Mail sent or received by households constituted 83 percent of total mail in FY 2011. Fifty-seven percent of the mail households received was sent Standard Mail. Only three percent of household mail was sent between households; the rest was sent between households and non-households.

Table E.1:
Mail Received and Sent by Households

(Billions of Pieces)

Mail Classification	Received	Sent
First-Class Mail	47.8	15.6
Standard Regular Mail	60.3	—
Standard Nonprofit Mail	12.0	—
Periodicals	5.4	—
Package & Shipping Services	2.1	0.5
Total	127.5	16.1
Household to Household	4.6
Total Mail Received and Sent by Households	139.1
FY 2010 RPW Total *	167.9
Non-household to Non-household Residual	28.8
Unaddressed	1.1	—

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.
* Includes First-Class and Standard Mail packages.

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 2009 through 2011.

Thirty-five percent of household mail contains correspondence and transactions, down from 36 percent in 2010. In terms of volume, total correspondence fell 3.3 percent compared to 2010. However, longer-term trends show that, over the past several years, correspondence fell more significantly. For example, since 2002, correspondence fell 33 percent. In part, the decline in correspondence is a continuation of long-term trends, but it is also strongly related to changing demographics and new technologies. Younger households send and receive fewer pieces of correspondence mail because they tend to be early adaptors of new and faster communication media such as e-mails, social networking, and smart phones.

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

(Billions of Pieces)

Market	2009	2010	2011
Correspondence	13.2	12.9	12.6
Transactions	41.2	37.6	35.6
Advertising	85.1	83.5	85.0
Periodicals	6.0	5.5	5.4
Packages	3.7	3.6	4.0
Unclassified	3.6	4.7	3.9
Total	145.0	141.2	139.1

Source: HDS Diary Sample, FY 2008, 2009, and 2011.
Notes:
Correspondence and Transactions include 7.4 billion pieces of First-Class advertising-enclosed mail (excluded from totals).
Package volumes include ground packages and expedited, as well as
1.7 billion pieces of CD/DVD rentals.

For the first time, in 2011, more than 50 percent of all bills were paid electronically.

Electronic alternatives also affect transactions mail volume. Over time, automatic deduction and online bill pay account for a growing share of household bill payments. In fact, over the previous eight years, the percentage of bills paid by electronic methods increased from 17 percent in 2002 to 51 percent in 2011. In contrast, bills paid by mail decreased from 75 percent to 45 percent of total payments over the same period of time. This was the first time that more than half of bills were paid electronically.. In-person payments decreased from 8 percent in 2002 to 4 percent in 2011. Similarly, the Internet has contributed to some decline in the share of bills and statements households received through the mail. Bills and statements received online continue to grow at a fast pace, albeit from a relatively small base ( in 2011 households received an average of 2.8 pieces of bills and statements online, compared to 14.4 pieces in the mail) .

Advertising mail represented well over half (61 percent) of all mail received by households in 2011. As shown in Table E.3, 85 percent of all advertising mail received by households is Standard Mail (72.3 billion pieces). The remainder consists of First-Class Mail; either stand-alone advertising (5.3 billion pieces), or secondary advertising that is sent along with other matter (7.4 billion pieces).

Over time, the data show a steady decline in the share of First-Class advertising mail, from 21 percent in 2002 to only 15 percent in 2011.

Table E.3:
Advertising by Mail Class

Mail Classification	Volume (Billions)	Percent of Total Advertising
First-Class Advertising	12.6	15%
Standard Regular Mail	60.3	71%
Standard Nonprofit Mail	12.0	14%
Total Advertising Mail	85.0	100%

Source: HDS Diary Sample, FY 2011.

As shown in Table E.4, households received 5.4 billion Periodicals via mail in 2011, less than in both 2009 and 2010. More than three-quarters of these were magazines. Newspapers are only 15 percent of total Periodicals, down from 35 percent in 1987. Contributors to the decline in newspaper volumes were lower circulation and readership levels, as well as a strong growth of the Internet as an alternative delivery method over the past decade.

Table E.4:
Periodical Type Received

Mail Classification	Volume (Billions)	Percent of Total Periodicals
Newspapers	0.8	14%
Magazines	4.1	77%
Unclassified	0.5	9%
Total Periodicals	5.4	100%

Source: Household Diary Study, FY 2011.

In 2011, households received 3.0 billion and sent 1.1 billion packages. Compared to 2010, total packages sent and received increased 13 percent, with most of the growth coming from First-Class packages. In general, delivery from mail order and Internet retailers is an important driver of package volume. While the HDS data is not designed to quantify this, 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	2011
	Received		Sent
	Number	Percent	Number	Percent
First-Class Mail	1,424	47%	969	87%
Expedited	374	12%	75	7%
Standard Mail	667	22%	—	—
Package & Shipping Services	546	18%	68	6%
Unclassified	2	0%	0	0%
Total Packages	3,013	100%	1,112	100%

Source: HDS Diary Sample, FY 2011.
Notes:
Totals may not sum due to rounding.
Expedited includes Priority Mail and Express Mail.
First-Class packages include 17 billion pieces of CD/DVD rentals sent to and received from Netflix, Blockbuster, etc., reported in First-Class Mail letters in Tables E.1, 1.5, and 1.6.

Image of a rectangle Chapter 1: Introduction – Volumes & Trends

The United States Postal Service Household Diary Study (HDS) Report documents the findings of the Fiscal Year (FY) 2011 study. The HDS measures the mail sent and received by U.S. households, tracks household mail trends, and compares mail use between different types of households.

The Household Diary Study
provides a means to track
household mail trends over time.

The Survey

· Demographics,

· Attitudes toward mail and advertising,

· Bill payment behavior, and

· Use of the Internet and other information technologies.

These data are used for market research, forecasting, and strategic planning within the Postal Service.

The Survey Consists of Two Parts:

1) An entry, or recruitment interview, conducted by phone or Web, collects demographic and attitudinal information from about 8,500 households.

2) These households then receive a mail diary, which collects information on the mail the household sends and receives in a one-week period. Annually, about 5,200 households successfully complete the diary.

The data generated by these two instruments are the basis of the analysis in this report.

The HDS FY 2011 report covers the period from September 27, 2010, through September 25, 2011, roughly equivalent to the Government Fiscal Year (GFY) used by the Postal Service. Data from FY 2009 and FY 2010 are also reported on a GFY basis.

U.S. Postal Service Volumes

Serving a nation containing five percent of the world’s population, according to the Universal Postal Union, the Postal Service delivers approximately 40 percent of the world’s mail. The Postal Service delivered 167.9 billion pieces of mail in FY 2011—a decrease of 3.0 billion pieces, or 1.7 percent, from 2010.

Although the economic recession ended in June 2009, the sluggishness of the recovery that followed adversely affected mail volumes well into FY 2011. Additionally, the continuing migration of transaction and correspondence mail to the Internet and other electronic alternatives further exacerbated the decline in volumes.

Standard Mail volume, consisting mostly of advertising material, is strongly correlated to the health of the economy. Accordingly, in 2011, the slow recovery led to modest growth, as volumes rose only 2.6 percent over 2010 (about 2.2 billion pieces). Even so, the growth represented the first increase since 2007, and was an improvement over flat volumes in 2010 compared to 2009

In 2011, First-Class Mail volume fell 6.4 percent (about 5 billion pieces), continuing a long-term negative trend that began 2001. Ongoing diversion of correspondence and transaction mail to electronic alternatives and the weak economy were key contributors to the decline. First-Class Single-Piece letters and cards, impacted mostly by the growing use of online bill payments and emails, fell 10.7 percent from 2010 to 2011. Presort letters and cards (which include most of the advertising material that is sent First-Class) fell 3.7 percent from the combined impact of electronic diversion and a sluggish economy.

The Postal Service estimates the revenues, volumes, and weight of mail pieces going through the postal network by using a combination of statistical sampling systems, mailing statements, and accounting data. These data are published in the Revenue, Pieces, and Weight (RPW) Reports.

Table 1.1 presents the RPW volumes for FY 2011, along with data for FY 2010 and FY 2009.

Table 1.2 reports revenue, pieces, and weight data by class and shape for FY 2011.

· The letters column heading includes postcards and refers to pieces that are less than 11.5 inches wide by 6.125 inches tall and less than .25 inches thick.

· Flats consist of pieces that are greater than 11.5 inches wide, 6.125 inches tall, or .25 inches thick, but less than 12 by 15 by .75 inches.

· Parcels are pieces that are larger than 12 by 15 inches, or thicker than .75 inches.

Because of the difficulty involved in recording mail-piece characteristics in the Household Diary, these categories do not correspond precisely to the shape categories used by HDS respondents.

Table 1.3 is derived from Table 1.2 and shows the revenue per piece and weight per piece for each subclass of mail by shape.

Table 1.1:
Total Mail Volume: FY 2009, 2010, and 2011

(Billions of Pieces)

Mail Classification	2009	2010	2011
Mailing Services:
First-Class Mail:
Single-Piece Letters & Cards	31.6	28.9	25.8
Presort Letters & Cards	47.9	46.2	44.5
Flats	2.9	2.5	2.2
Parcels	0.6	0.6	0.6
Other *	0.8	0.3	0.3
Total First-Class Mail	83.8	78.2	73.5
Standard Mail:
High Density & Saturation Letters	5.0	5.4	5.7
High Density & Saturation Flats & Parcels	11.8	11.4	11.4
Carrier Route	10.0	9.4	9.3
Letters	46.8	48.3	50.6
Flats	7.8	7.0	6.8
Not Flat-Machinables & Parcels	0.7	0.7	0.7
Other *	0.4	0.3	0.2
Total Standard Mail	82.4	82.5	84.7
Periodicals	8.0	7.3	7.1
Package Services	0.7	0.7	0.7
USPS and Free Mail	0.5	0.5	0.5
Total Mailing Services	175.4	169.2	166.5
Shipping Services	1.4	1.5	1.5
Total All Mail	176.8	170.9	167.9

Source: RPW Reports.
Note: Totals may not sum due to rounding.
* Other includes: Negotiated Service Agreements (NSAs), International Mail, Express Mail, and Fees (not reported by shape).

Table 1.2:
Total Mail: Revenue, Pieces, and Weight by Shape, FY 2011

Mail Classification	Revenue				Pieces				Weight
	*(Millions of Dollars)*				*(Millions of Pieces)*				*(Millions of Pounds)*
	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total
Mailing Services:
First-Class Mail:
Single-Piece Letters & Cards	11,581	0	0	11,581	25,847	0	0	25,847	778	0	0	778
Presort Letters & Cards	15,488	0	0	15,488	44,494	0	0	44,494	2,233	0	0	2,233
Flats	27	2,787	0	2,814	20	2,211	0	2,231	6	449	0	455
Parcels	2	136	1,147	1,284	1	80	557	638	0	21	188	209
Total First-Class By Shape	27,098	2,923	1,147	31,168	70,363	2,290	557	73,210	3,018	470	188	3,675
Other*				1,011				310				51
Total First-Class Mail				32,178				73,521				3,726
Standard Mail:
High Density & Saturation Letters	768	0	0	768	5,654	0	0	5,654	238	0	0	238
High Density & Saturation Flats & Parcels	73	1,808	0	1,881	506	10,918	1	11,425	23	2,121	0	2,144
Carrier Route	26	2,196	0	2,222	125	9,211	0	9,336	5	1,988	0	1,993
Letters	9,707	0	0	9,708	50,584	0	0	50,584	2,667	0	0	2,667
Flats	1	2,488	1	2,491	3	6,777	3	6,783	1	1,709	0	1,710
Not Flat-Machinables & Parcels	0	0	651	651	0	0	734	734	0	0	322	322
Total Standard By Shape	10,575	6,492	652	17,720	56,872	26,906	738	84,516	2,933	5,818	322	9,074
Other*				106				176				19
Total Standard Mail				17,826				84,692				9,092
Periodicals:
Total Periodicals By Shape	13	1,795	4	1,813	75	6,995	6	7,077	5	2,712	8	2,725
Other *				8				0				0
Total Periodicals				1,821				7,077				2,725
Package Services
Total Package Services By Shape	0	236	1,342	1,578	0	263	412	675	0	381	1,403	1,784
Other*				27				0				0
Total Package Services				1,606				675				1,784
USPS and Free Mail				0				496				180

Total Mailing Services By Shape	37,687	11,447	3,145	52,279	127,310	36,455	1,712	165,478	5,956	9,380	1,922	17,258
Total Other*				1,153				983				249
Total Mailing Services				53,432				166,461				17,507

Shipping Services:
Total Shipping Services By Shape	72	881	5,249	6,203	15	175	905	1,095	1	141	2,591	2,733
Total Other*				2,629				379				621
Total Shipping Services				8,832				1,473				3,354

Total All Mail				62,263				167,934				20,860
Total All Services**				3,476				1,362				870
Total All Mail & Services				65,739

Source: RPW Reports.
Note: Totals may not sum due to rounding.
* Other includes: NSAs, International Mail, Express Mail and Fees (not reported by shape).
** All Services include Ancillary and Special Services.

Table 1.3:
Total Mail: Revenue and Weight per Piece by Shape, FY 2011

Mail Classification	Revenue per Piece				Weight per Piece
	*(Dollars)*				*(Ounces)*
	Letters	Flats	Parcels	Total	Letters	Flats	Parcels	Total
Mailing Services:
First-Class Mail:
Single-Piece Letters & Cards	0.448			0.448	0.482			0.482
Presort Letters & Cards	0.348			0.348	0.803			0.803
Flats	1.346	1.261		1.261	4.991	3.250		3.266
Parcels		1.703	2.060	2.013		4.153	5.402	5.236
Total First-Class By Shape	0.385	1.276	2.060	0.426	0.686	3.281	5.402	0.803
Other*				3.256				2.607
Total First-Class Mail				0.438				0.811
Standard Mail:
High Density & Saturation Letters	0.136			0.136	0.673			0.673
High Density & Saturation Flats & Parcels	0.144	0.166	0.485	0.165	0.718	3.108		3.003
Carrier Route	0.205	0.238	0.702	0.238	0.678	3.453	7.318	3.416
Letters	0.192			0.192	0.844			0.844
Flats	0.462	0.367	0.443	0.367	5.046	4.035	0.709	4.034
Not Flat-Machinables & Parcels			0.887	0.887			7.012	7.012
Total Standard By Shape	0.186	0.241	0.885	0.210	0.825	3.460	6.990	1.718
Other*				0.604				1.680
Total Standard Mail				0.210				1.718
Periodicals
Total Periodicals By Shape	0.176	0.257	0.653	0.256	1.112	6.203	20.795	6.162
Other*
Total Periodicals				0.257				6.162
Package Services
Total Package Services By Shape	0.000	0.897	3.259	2.338	0.000	23.112	54.535	42.275
Other*
Total Package Services				2.378				42.275
USPS and Free Mail				0.000				4.841

Total Mailing Services By Shape	0.296	0.314	1.837	0.316	0.749	4.117	17.957	1.669
Total Other*				1.172				4.047
Total Mailing Services				0.321				1.683

Shipping Services:
Total Shipping Services By Shape	4.913	5.045	5.797	5.666	1.193	12.887	45.782	39.934
Total Other*				6.942				26.240
Total Shipping Services				5.994				36.415

Total All Mail				0.371				1.987

Source: RPW Reports.
Note: Totals may not sum due to rounding.
* Other includes: NSAs, International Mail, Express Mail, and Fees (not reported by shape).

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 non-household,

3) Non-household to household, and

4) Non-household to non-household.

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)

Sent By:	Received By:
Sent By:	Household	Non-household	Total Originating
Household	4.6	11.5	16.1
Non-household	123.0	28.8	151.8
Total Destinating	127.5	40.4	167.9

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.

Table 1.4b:
Total Domestic Mail Flows

Mail Flows	Billions of Pieces	Percent of Total Mail
Sent by Household	16.1	10%
Non-Household to Household	123.0	73%
Total Household Mail	139.1	83%
Non-Household to Non-Household	28.8	17%
Total Mail	167.9	100%

Table 1.4c:
Domestic Mail Flows per Household per Week

Sent By:	Received By:
Sent By:	Household	Non-household
Household	0.7	1.6
Non-household	19.9	N/A

Source: Household Diary Study, FY 2011.

Household Mail

As shown in Tables 1.4a and 1.4b, domestic mail to and from households constituted 83 percent of total mail volume in 2011, which equates to 22.5 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 HDS. The table shows the categories in which the households record their mail. Households received 127.5 billion pieces of mail and sent 15.6 billion. Both of these totals include the 4.76 billion pieces of mail that households sent to each other. The total mail received or sent by households in FY 2011 was 139.1 billion pieces.

Table 1.5:
Mail Received and Sent by Households

(Billions of Pieces)

Mail Classification	Received		Sent
First-Class Mail	47.8		15.6
Standard Regular Mail	60.3		-
Standard Nonprofit Mail	12.0		-
Periodicals	5.4		-
Packages & Shipping Services*	2.1		0.5
Total	127.5		16.1
Household to Household	4.6
Total Mail Received and Sent by Households	139.1
FY 2011 RPW Total	167.9
Non-household to Non-household (Residual)	28.8
Unaddressed	0.5	-

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.
* Includes First-Class and Standard Mail packages.

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 Household	Pieces per Household per Week
Mail Received
First-Class Mail	402	7.7
Standard Regular Mail	508	9.8
Standard Nonprofit Mail	101	2.0
Periodicals	45	0.9
Packages*	14	0.3
Expedited	3	0.1
Total Mail Received	1075	20.7
Mail Sent
First-Class Mail:	1	2.5
Packages*	2	0.0
Expedited	2	0.0
Total Mail Sent	136	2.6
Unaddressed	9	0.2

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.
* 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 primarily includes letters and cards.

· Standard Mail is advertising mail. For the most part, Standard Mail comprises 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.

Table 1.7:
Mail Received and Sent by Households

Class	Market *(Billions of Pieces)*
Class	Correspondence	Transactions	Advertising	Periodicals	Packages	Total
First-Class Mail	12.6	35.6	12.6	-	2.3	55.7
Standard Mail	-	-	72.4	-	0.7	73.0
Periodicals	-	-	-	5.4	-	5.4
Packages & Shipping Services	-	-	-	-	1.0	1.0
Total	12.6	35.6	85.0	5.4	4.0	135.2
Unclassified	-	-	-	-	-	3.9
Total Mail Received and Sent by Households	-	-	-	-	-	139.1

Source: HDS Diary Sample FY 2011.
Notes: Correspondence and Transactions include 7.4 billion pieces of secondary advertising mail also reported in Advertising Mail.
The “Total” column for each class does not include pieces that could not be identified according to markets (Unclassified).
First-Class Packages include 1.7 billion pieces of CD/DVD rentals sent to and received from Netflix, Blockbuster, etc., reported in First-Class Mail letters in Tables E.1, 1.5, and 1.6.

Report Organization

The rest of the Household Diary Study report is organized around the markets the mail serves. Each chapter contains an analysis of the trends in the HDS data, as well as a discussion of how those trends affect and are affected by changes in the broader market. The following provides an overview of each chapter.

Chapter 2: Profile of Mail Usage gives an analysis of household demographics. This chapter examines demographic trends over time and their impact on the mail, and discusses attributing factors, such as access to technology and changing attitudes.

Chapter 3: Correspondence examines mail that is used solely or primarily to deliver (non-sales-related) communications, such as letters and greeting cards. This chapter includes analysis of both personal and business correspondence.

Chapter 4: Transactions reviews financial transactions in the mail and the impact of new technologies on that market. It analyzes household bill payment trends with a focus on technological and demographic change.

Chapter 5: Advertising Mail presents the trends in mail used to deliver sales-related messages. It contains information on household attitudes towards advertising by various media, treatment of advertising mail, and demographic determinants of advertising mail receipt.

Chapter 6: Periodicals examines magazines and newspapers delivered in the mail. It looks at how changing demographics are affecting the market for periodicals, and what the implications are for future volume.

Chapter 7: Packages analyzes household use of various types of packages, and it discusses the household market for merchandise delivery.

In addition, there are three appendices to the report:

Appendix A contains a set of comparative tables for FY 1987, FY 2010, and FY 2011, organized by class of mail. A concordance is presented for comparison with pre-2000 reports.

Appendix B documents the study methodology and discusses how the data were collected, weighted, and adjusted, and compares demographic data in the sample to that of the population as a whole.

Appendix C contains the instruments used to administer the survey.

Image of a rectangle Chapter 2: Profile of Mail Usage

Introduction

This chapter provides information on demographic trends and other factors affecting mail volume, providing a basis for assessing mail volume growth. The breakouts introduced provide the basis for much of the analyses in subsequent chapters.

The first section looks at growth in mail volume, population, households, and delivery points over recent decades. The next section examines the demographic characteristics of mail users, contrasting higher-mail-volume households with lower-volume households. The third section details the emerging demographic and technological trends that will affect the future of mail. The last section examines some of the factors affecting the use of post offices and mailboxes.

Mail Volume and Demographics

Total U.S. mail volume grew from 110 billion pieces in 1981 to 168 billion in 2011, an increase of 52 percent. This growth outpaced the rate of population growth and household formation. Over the same period, according to the U.S. Census Bureau, the adult population grew 33 percent and households grew about 44 percent. The number of places to which the Postal Service delivers increased still faster, growing by 55 percent (see the USPS annual reports). As Table 2.1 shows, however, volume decreased by an average of two percent per year over the last ten years (due to large declines from 2007 onward), while U.S. population growth, household formation, and delivery points increased by an average of one percent per year. With falling revenues and rising costs, the Postal Service suffered significant financial losses towards the end of the decade.

Total U.S. mail volume decreased by
an average of two percent per year
between 2001 and 2011,
while population and household
formation increased by an average
of one percent per year.

The 1980s was a time of extraordinary mail volume growth that began in 1978 and continued through 1988. In 1984, mail volume grew more than ten percent. During this period, technology facilitated this growth. Construction of computerized databases and techniques for sorting large amounts of data created a fertile climate for direct mail marketing. Computerization of financial systems encouraged billing by mail and payments through the mail. These innovations in business processes were further encouraged by the expansion of postal rate discounts.

The Postal Service introduced work-sharing discounts, encouraging mailers to prepare the mail in ways that reduce the total system cost of creating and delivering the mail. Mailers could take advantage of these discounts by sorting the mail in advance. The Postal Service would receive the mail presorted to the individual ZIP codes and/or to the carrier routes associated with those ZIP codes.

In the late 1980s and early 1990s, mail volume growth barely kept pace with household growth. The demand for mail was hurt by a recession and two very large rate increases. This was also a period in which the Postal Service absorbed substantial costs that were reapportioned from the Federal government’s retirement programs.

Table 2.1:
Mail Volume and Demographics
Average Annual Growth, 1981-2011

	1981-1990	1991-2000	2001-2011
Total Mail Volume	4.6%	2.3%	-2.1%
Delivery Points	1.7%	1.5%	1.0%
Adult Population	1.5%	1.3%	1.2%
Households	1.4%	0.9%	0.9%

Source: U.S. Postal Service, U.S. Census Bureau.

The latter half of the 1990s saw rapid growth in mail volume, spurred by a strong economy and rates that increased by less than inflation. The Postal Service also realigned the incentives built into its price structure. It reduced the incentives mailers had for presorting mail and encouraged them to prebarcode their mail. By 2002, the majority of letters the Postal Service received had qualifying barcodes on them. This restructuring of the rates took advantage of the extensive automation of mail preparation and sorting that occurred in the previous decade.

During the 1990s, the U.S. economy rapidly embraced information technology and integrated the Internet into its business processes. An economic recession followed that began in March 2001. The 2001 terrorist attacks on the World Trade Center and the Pentagon led to large-scale disruptions of those mail services dependent on air transport, such as First-Class, Priority, and Express Mail. When air service was restored, Priority Mail was no longer allowed on commercial passenger flights. Soon afterwards, lethal anthrax was sent through the mail, which resulted in five deaths and a number of serious injuries. These terrorist attacks, combined with the economic recession, caused mail volume to decline 2.2 percent in 2002, which was, at the time, the largest annual decline since World War II. In 2003, Standard Mail volume recovered to a new high, but total First-Class volume continued to decline. Work-shared First-Class Mail fell for the first time ever. Since 2003, Standard Mail volume grew along with the economy, reaching new highs and exceeding First-Class Mail for the first time in 2005. Total First-Class volume, on the other hand, continued to decline, in part due to the diversion of bills and statements to electronic alternatives and the lower-cost Standard Mail option as an alternative to First-Class advertising.

The economic recession that began in December 2007 and ended in June 2009 had a severe impact on the mail. Total mail volume plunged 12.7 percent in 2009—the largest decline since the Great Depression. In July 2009, the recession was officially over but was followed by a slow recovery that continued through the end of 2011, resulting in a five percent cumulative decline in total mail volume since 2009. Though slow, the recovery did stimulate a three percent increase in Standard Mail between 2009 and 2011—a marked improvement from a 20 percent decline during the recessionary period. Continuing electronic diversion and a weak economy, however, brought about significant losses in First-Class Mail. Between 2009 and 2011, volume fell 12 percent—a rate of decline similar to the severe decline experienced during the recession (13 percent).

Between 2001 and 2011, total mail volume fell 19 percent, and First-Class volume fell 29 percent. During the same time period, both the adult population and households increased nine percent and the Postal Service added ten percent more delivery points to its network.

Continued growth in delivery points
has become an ongoing source
of pressure on postal costs.

The Postal Service depends on mail volume growth to fund universal service. The number of addresses the delivery network serves increases as the number of American businesses and households increases. When mail volume falls, as was the case between 2001 and 2011 the Postal Service’s ability to fund delivery service is hampered because the Postal Service charges its customers for piece volume but does not assess connect charges, access fees, or system fees, like many other network enterprises.

Characteristics of Higher- and Lower-Volume Households

Tables 2.2 and 2.3 show the demographic characteristics of households by the amount of mail received. It is apparent that household mail use is strongly correlated with both income and education. Note, however, the similar correlation between mail receipt and Internet access, which is also related to income and education. Therefore, households that make the most use of the mail are the households with the greatest opportunity to use alternatives to the mail.

These high-volume households are taking advantage of the opportunity to move away from the mail. Households that receive 30 or more pieces of mail each week pay an average of 35 percent of their bills online, up from 30 percent in 2009 and 33 percent in 2010. In comparison, households that receive less than 30 pieces of mail each week paid an average of 30 percent of their bills online. However, the percentage of online bill payments has also increased among these lower-volume households over time—up from 27 percent in 2009 and 28 percent in 2010.

Table 2.2:
Characteristics of Higher- and Lower-Mail-Volume Households

Mail Received (Pieces per Household per week)	Households *(Millions)*	Median Annual Household Income	Households w/ Internet Access *(Percent)*	Annual Bills Paid *(Pieces per Household per week)*	Annual Bills Paid by Internet *(Percent)*	Mail Sent *(Pieces per Household per week)*
45 or more	8.6	$111,854	95%	177	36%	4.7
36-44	11.6	$84,035	92%	160	35%	3.5
30-35	11.5	$79,817	92%	155	35%	3.0
24-29	18.4	$72,695	87%	150	32%	2.7
18-23	23.3	$56,475	81%	135	31%	2.2
12-17	20.6	$42,932	78%	116	30%	1.7
Less than 12	24.6	$22,111	70%	92	29%	0.9
Total	118.7	$57,722	82%	132	32%	2.3

Source: HDS Diary Sample, FY 2011.
Note: Mail received includes USPS and Non-USPS mail.

Table 2.3:
Education of Higher- and Lower-Mail-Volume Households

Mail Received (Pieces per Household per week)	Households *(Millions)*	Educational Attainment of Head of Household
Mail Received (Pieces per Household per week)	Households *(Millions)*	Less than High School	High School Graduate	Some College or Technical School	College Graduate
45 or more	8.6	2%	17%	15%	66%
36-44	11.6	8%	23%	20%	48%
30-35	11.5	5%	25%	24%	46%
24-29	18.4	7%	26%	29%	38%
18-23	23.3	14%	31%	22%	33%
12-17	20.6	11%	35%	23%	30%
Less than 12	24.6	23%	33%	22%	21%
Total	118.7	12%	29%	23%	36%

Source: HDS Diary Sample, FY 2011.
Note: Percentages may not total 100 percent due to heads of households who did not answer the educational attainment question.
Mail received includes USPS and Non-USPS mail. Percentages in this table are row percentages.
Excludes households not receiving any mail delivery at their home address (using mailbox only).

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

(Percent 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	25%	40%	21%	13%	100%
$35 to $65	11%	31%	29%	29%	100%
$65 to $100	7%	27%	22%	44%	100%
Over $100	1%	13%	18%	67%	100%
Don’t know/ Refused	8%	26%	21%	43%	100%
Total	12%	29%	23%	36%	100%

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.

Table 2.5:
Households by Income and Age

(Percent 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	22%	29%	49%	0%	100%
$35 to $65	24%	33%	43%	0%	100%
$65 to $100	24%	44%	32%	0%	100%
Over $100	14%	57%	28%	0%	100%
Don’t know/ Refused	21%	34%	41%	4%	100%
Total	22%	38%	39%	1%	100%

Source: HDS Diary Sample, FY 2011.
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 18 percent of the total. Once considered the norm, nuclear families—two adults and at least one child—now account for only 20 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	24.8
Two	43.6
Three	21.1
Four	18.1
Five or more	11.1
Total	118.7

Source: HDS Diary Sample, FY 2011.
Note: Total may not sum due to rounding.

Table 2.7:
Households by Number of Adults

(Millions of Households)

Number of Adults
One	27.5
Two	70.4
Three or more	20.9
Total	118.7

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.

Internet Access

Access to the Internet and use of new technologies, such as Broadband, have a large and growing impact on mail use. Bills, statements, and bill payments still represent a significant number of pieces sent and received by households. However, electronic activity in this area is diverting mail once used for these purposes. On the other hand, online shopping potentially adds packages and catalog delivery to the Postal Service mail stream.

Table 2.8 shows that 82 percent of households have Internet access and 76 percent have Broadband access. The highest levels of Internet and Broadband access are within households with incomes over $100,000 (97 and 94 percent, respectively), as seen in Figure 2.1a. In comparison, households with incomes below $35,000 are less likely to have access to the Internet and Broadband (59 and 57 percent, respectively). As shown in Figure 2.1b, age is also an important determinant of households having Internet access. Younger households (heads of households younger than 35 years old) are more likely to have access to both the Internet and Broadband (91 and 87 percent, respectively). Older households (heads of households older than 55 years of age), on the other hand, are less likely to have access to the Internet and Broadband (65 and 58 percent, respectively).

Table 2.8:
Households by Type of Internet Access

(Millions of Households)

Type of Internet Access
Broadband	90.1
Dial-up	7.4
None	21.2
Total	118.7

Source: HDS Diary Sample, FY 2011.
Note: Totals may not sum due to rounding.

Figure 2.2 shows the trend in Broadband connections. The rapid growth of Broadband expands the potential scope of electronic diversion of the mail. The Internet’s fast, always-on connection makes it a stronger alternative medium for the delivery of entertainment, information, and communication. As more households begin using Broadband, the more that bill payments, bill and statement presentment, periodicals, and even advertising mail, will be affected.

Figure 2.1a:
Internet Access by Income and Type

Figure 2.1a: Internet Access by Income and Type

Source: HDS Recruitment Data, FY 2011.
Note: Sum of Internet Access and None does not equal 100 percent due to missing responses and access outside the home only. Sum of Broadband and Dial-up does not equal the 100 percent due to missing responses.

Figure 2.1b:
Internet Access by Age and Type

Figure 2.1b: Internet Access by Age and Type

Figure 2.2:
Broadband Subscribers

Figure 2.2: Broadband Subscribers

Source: Leichtman Research Group.

Use of the Post Office

The Postal Service currently owns and operates 35,756 post office locations throughout the U.S.
As shown in Figure 2.3, in spite of a declining frequency of visits from the prior year, the use of post offices for mailing services continues to dominate the mail service industry. Over 60 percent of all U.S. households patronize a post office at least once a month, while just 14 percent visit a private mailing company. Over 27 percent of all households in the U.S. visit the post office three or more times 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 strong.

A rented mailbox is one alternative that households use to manage their mail. In 2011, 2.8 percent of all households in the U.S. rented mailboxes from the Postal Service, and 0.8 percent rented a box from a private company. Post office box use, however, declined in the past ten years, with 2.8 percent of U.S. households renting a post office box from the Postal Service in 2011, compared to 10 percent in 2001.

Figure 2.3:
Household Visits to Post Office in Past Month

Figure 2.3: Household Visits to Post Office in Past Month

Source: HDS Recruitment Data, FY 2010 and 2011.

Image of a rectangle 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, examines comparisons in data between 2009 and 2011, providing an illustration of mail trends over time.

Correspondence Mail Volume

Total correspondence sent and received represents about ten percent of all household mail volumes, as shown in Table E.2. Table 3.1 provides a recent history of total correspondence volumes, showing a 4.4 percent decline from 2009 to 2011. Personal correspondence, which is essentially household to household mail, fell 16 percent from 2009 to 2011, continuing a declining long-term trend that started almost 25 years ago. In 1987, households reported receiving 1.6 pieces of personal correspondence each week. By 2011, personal correspondence received declined 56 percent, to just 0.7 pieces per household per week.

In large part, this decline stemmed from competition from an ever-changing landscape of communication technologies, such as affordable long-distance telephone service and, more recently, e-mail, social networking, and cellular communications—all of which provide an alternative to personal letters and business inquiries. Such advances in technological communications completely transformed the marketplace, and continue to have an impact on personal correspondence. It should be noted that the increases in household correspondence to and from non-households shown in Table 3.1 resulted from questionnaire improvements implemented in the 2011 survey. As a result, previously unclassified volumes were restated to more specific mail categories.

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

Tables 3.2 and 3.3 on the following page show that both household income and educational attainment have a strong effect on correspondence sent and received by households. In most cases, the volume of correspondence sent and received by households with the highest income or the highest education is more than double the volume that is sent and received by households with the lowest income or the lowest education.

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

Sector	Volume (Millions of Pieces)			Change, 2009-2011
Sector	2009	2010	2011	Change, 2009-2011
Household to household	5,225	4,959	4,387	-16.0%
Non-household to household	6,057	6,082	6,464	6.7%
Household to non-household	1,911	1,882	1,762	-7.8%
Total	13,192	12,922	12,613	-4.4%
Sector	Pieces per Household per Week			Share of 2011 Total
Sector	2009	2010	2011	Share of 2011 Total
Household to household	0.9	0.8	0.7	34.8%
Non-household to household	1.0	1.0	1.0	51.2%
Household to non-household	0.3	0.3	0.3	14.0%
Total	2.2	2.1	2.0	100%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes: Totals may not sum due to rounding.

Increases in correspondence between households and non-households are due to 2011 questionnaires changes restating previously unclassified mail pieces.

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	.8	1.3	1.3	1.4	1.2
$35 to $65	1.4	1.7	1.5	1.8	1.6
$65 to $100	1.1	1.5	1.6	2.3	1.9
Over $100	4.7	2.3	2.1	2.7	2.5
Average	1.1	1.5	1.6	2.3	1.8

Source: HDS Diary Sample, FY 2011.
Note: Excludes Don’t Know/Refused.

*The large number is due to a very small sample size for this category.

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	.2	.8	.7	.8	.7
$35 to $65	.6	.9	.9	1.1	.9
$65 to $100	1.3	.8	.9	1.4	1.1
Over $100	1.7	.9	1.1	1.6	1.4
Average	.5	.8	.9	1.4	1.0

Source: HDS Diary Sample, FY 2011.
Note: Excludes Don’t Know/Refused.

Tables 3.4 and 3.5 show that age also has a significant effect on correspondence mail sent and received by households. Regardless of their income, in most cases, younger households both send and receive fewer pieces of correspondence mail. Young adults have traditionally sent and received less mail than older adults, but the advent of the Internet age widened the gap between these two age groups.

Table 3.4:
Correspondence Mail Received 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	1.0	1.1	1.3	1.2
$35 to $65	1.4	1.3	2.0	1.6
$65 to $100	1.6	1.8	2.2	1.9
Over $100	2.3	2.6	2.5	2.5
Average	1.4	1.8	1.9	1.8

Source: HDS Diary Sample, FY 2011.

Table 3.5:
Correspondence Mail Sent 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	.3	.6	.9	.7
$35 to $65	.8	.6	1.3	.9
$65 to $100	1.0	1.0	1.4	1.1
Over $100	.9	1.5	1.5	1.4
Average	.7	1.0	1.2	1.0

Source: HDS Diary Sample, FY 2011.

Household Size

As would be expected, household size has a positive effect on correspondence mail. Tables 3.6 and 3.7 show that the jump from one person to two is associated with a considerable increase in correspondence mail. Further increases in size can have varying effects. As shown in Table 3.7, these increases are generally because of 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	1.1	.8
Two	1.8	1.1
Three	1.8	.9
Four	2.3	1.2
Five or more	2.0	1.0
Total	1.8	1.0

Source: HDS Diary Sample, FY 2011.

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	1.1	.7
Two	1.9	1.1
Three or more	2.0	1.1
Average	1.8	1.0

Source: HDS Diary Sample, FY 2011.

Internet Access

Table 3.8 shows that households with Internet access (Broadband and Dial-up) 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 a connection. Similarly, on average, households with Internet access have a higher level of education than those without access. 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	1.8	1.0
Dial-up	1.7	1.1
None	1.3	.8
Average	1.8	1.0

Source: HDS Diary Sample, FY 2011.

Table 3.9:
Income and Education by Type of Internet Access

Type of Internet Access	Median Income	% w/ College Degree
Broadband	67,538	43%
Dial-up	51,080	27%
None	23,139	12%

Source: HDS Diary Sample, FY 2011.

Personal Correspondence

In FY 2011, personal correspondence accounted for an average of 0.7 pieces of mail per week, which is lower than in both 2009 and 2010. Table 3.10 shows the total volumes and average number of pieces by personal correspondence type.

The volume of personal letters continued to decline in 2011—a trend primarily driven by the adoption of the Internet as a preferred method of communication. Similarly, all other types of personal correspondence also fell because of the increasing availability of new electronic alternatives (such as e-cards, e-vites, smart phones, and social networks).

Each year, the rise of these new virtual technologies continues to change the way friends and family stay in touch. The weak economic recovery also contributed to the decline, as spending on cards and other correspondence-related products also decreased.

Table 3.10:
Personal Correspondence Sent and Received

Correspondence Type	Volume (Millions of Pieces)			Change, 2009-2011
Correspondence Type	2009	2010	2011	Change, 2009-2011
Personal Letters	956	850	644	-32.6%
Holiday Greeting Cards	1,959	2,073	1,945	-0.7%
Non-Holiday Greeting Cards	1,409	1,295	1,173	-16.7%
Invitations/Announcements	686	522	492	-28.2%
Other Personal	215	219	133	-38.0%
Total	5,225	4,959	4,387	-16.0%
Correspondence Type	Pieces per Household per Week			Share of 2011 Total
Correspondence Type	2009	2010	2011	Share of 2011 Total
Personal Letters	.2	.1	.1	14.7%
Holiday Greeting Cards	.3	.3	.3	44.3%
Non-Holiday Greeting Cards	.2	.2	.2	26.7%
Invitations / Announcements	.1	.1	.1	11.2%
Other Personal	.0	.0	.0	3.0%
Total	.9	.8	.7	100.0%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Note: Totals may not sum due to rounding.

Figure 3.1:
Personal Correspondence Sent by Income Group

(Pieces per Household per Year)

Figure 3.1: Personal Correspondence Sent by Income Group

Source: HDS Diary Sample, FY 2011.

Figure 3.2:
Personal Correspondence Sent by Age Cohort

(Pieces per Household per Year)

Figure 3.2: Personal Correspondence Sent by Age Cohort

Source: HDS Diary Sample, FY 2011.

Figure 3.1 above shows the major personal correspondence types by income. Personal correspondence sent by households seems to follow a pattern of higher-income households being more likely to send letters, holiday cards, and non-holiday greeting cards than lower-income households.

The largest disparity between high- and low-income households is in the volume of holiday greeting cards sent. Households with incomes greater than 100,000 sent an average of 25 holiday greeting cards in FY 2011, compared to the nine cards sent by households with incomes lower than $35,000.

Internet card use is quickly growing to a level comparable to non-holiday greeting card mail. For household with incomes lower than $35,000, the high volume of internet cards sent (13 per household per year) is probably due to a greater adoption rate by the younger heads of households, who typically have lower incomes.

The number of letters and greeting cards sent also seems to follow a pattern where households in which the head of household is aged 55 or older, on average, send more greeting cards than younger heads of household sent—an average of six letters and 20 holiday greeting cards in 2011. Figure 3.2 illustrates this point. These households also sent an average of 12 non-holiday greeting cards.

In comparison, younger households (in which the head of household is aged 35 or younger) sent an average of four letters, ten holiday greeting cards, and seven non-holiday cards in FY 2011.

The relationship between holiday greeting cards received and income is shown in more detail in Figure 3.3. In FY 2011, as in prior years, higher-income households received the most holiday greeting cards. Households with incomes greater than $100,000 received 25 holiday greeting cards, while households with incomes lower than $35,000 received only nine holiday greeting cards in FY 2011.

When examined by age, the number of holiday greeting cards received is typically much greater for households where the head of household is older. In 2011, households where the head of household is aged 55 or older, on average, received 20 holiday greeting cards, while households where the head of household is younger (35 or younger) received only ten.

Figure 3.3:
Holiday Greetings Received by Age and Income, FY 2009, 2010, and 2011

Figure 3.3: Holiday Greetings Received by Age and Income, FY 2009, 2010, and 2011

Source: HDS Diary data, Diary Sample only, FY 2009, 2010, and 2011.

As shown in Table 3.11, households with Internet access (including both Broadband and Dial-up) receive more letters, holiday cards, and non-holiday greeting cards, compared to households without Internet access. As discussed earlier, households with Internet access, on average, have higher income and education levels (see Table 3.9) attributes that typically lead to a greater use of written correspondence.

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	.08	.07	.11
Holiday Greeting Cards	.29	.33	.32
Non-Holiday Greeting Cards	.16	.18	.19
Total	.53	.59	.62

Source: HDS Diary Sample FY 2011.

Business Correspondence

This section of the report provides data on correspondence types between households and businesses. In addition to correspondence mail, households and businesses exchange bill payments, statements, and advertising (discussed in Chapters 4 and 5). Table 3.12 outlines volumes by types of correspondence for 2009 through 2011. Correspondence received from the non-household sector accounts for about 50 percent of all correspondence sent and received by households (see Table 3.1).

Invitations and announcements represent 42 percent of business and government correspondence received by households. Announcements are also the main type of social correspondence households receive; in 2011 they represented almost 85 percent of all social mail received.

As noted earlier, the increases in correspondence over prior years (shown in Table 3.12) are due to questionnaire improvements implemented in 2011. As a result, previously unclassified mail pieces were placed in more specific categories, creating distortion in growth rates from prior years.

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

Business Correspondence Type	2009	2010	2011	Change, 2009–2011
Business/Government/Social Received by Households
Invitation/Announcement	1,934	1,781	2,003	3.6%
Holiday Greeting from Business	396	323	358	-9.6%
Other Business/Government	1,671	2,050	2,381	42.5%
Total Business/Government Received	4,000	4,154	4,742	18.5%
Announcement	1,382	1,375	1,241	-10.2%
Other Social	675	552	481	-28.8%
Total Social Received	2,057	1,928	1,722	-16.3%
Total Received	6,057	6,082	6,464	6.7%
Business/Government/Social Sent from Households
Inquiry	404	408	79	-80.4%
Other Business/Government	1,146	1,101	1,373	19.8%
Total Business/Government Sent	1,550	1,509	1,452	-6.3%
Letter	61	86	40	-33.7%
Inquiry	58	52	2	-95.8%
Other Social	242	234	267	10.7%
Total Social Sent (Social includes social, political & nonprofit.)	361	373	310	-14.0%
Total Sent	1,911	1,882	1,762	-7.8%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes: Totals may not sum due to rounding.

Increases in correspondence between households and non-households are due to 2011 survey questionnaire
improvements which restated previously unclassified mail.

Image of a rectangle 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, as the availability of electronic alternatives affects traditional transactions mail.

Transactions Mail Volume

Transactions sent and received constitute slightly more than 25 percent of all household mail volumes (as seen in Table E.2) and 62 percent of household First-Class Mail; as such, they are an important part of the mail stream. Although many businesses use electronic funds transfer (EFT) or other electronic technologies to settle transactions, households still receive and pay a majority of their recurring bills through the Postal Service. As the Internet and Broadband become more ubiquitous, however, the movement towards consumer Electronic Bill Presentment and Payment (EBPP) is expected to continue gaining momentum.

As Table 4.1 shows, the total transactions volume sent and received by households fell 13.7 percent between 2009 and 2011. All major transaction categories contributed to the decline (the increase in insurance related transactions is due to a restatement of previously unclassified mail). 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. The availability of new payment alternatives, accompanied by an unprecedented economic downturn, resulted in a 22 percent decline in bills paid by mail between 2009 and 2011. The growth in non-mail methods of payments is also evident in Table 4.1, which shows that bills paid by mail are far fewer than total bills received (as discussed below, only 45 percent of all household bills were paid by mail in 2011).

Table 4.1: Transactions Mail Sent and Received

Transaction Type	Volume (Millions of Pieces)			Change, 2009–2011
Transaction Type	2009	2010	2011	Change, 2009–2011
Business
Bills	17,773	16,132	14,927	-16.0%
Bill Payments	8,580	8,088	6,707	-21.8%
Statements	7,279	6,375	5,618	-22.8%
Confirmations	1,461	1,285	1,275	-12.7%
Payments (to HH)	2,559	2,543	2,343	-8.4%
Orders	454	394	270	-40.5%
Rebates	175	161	140	-20.4%
Insurance Related	1,222	896	2,485	103.3%
Other Transactions	144	132	442	207.2%
Total Business	39,648	36,006	34,207	-13.7%
Social/Charitable
Requests for Donation	617	657	674	9.3%
Donations	521	484	366	-29.8%
Bills	184	169	124	-32.6%
Confirmations	274	265	207	-24.7%
Total Social/Charitable	1,596	1,575	1,370	-14.1%
Total Transactions	41,244	37,581	35,577	-13.7%

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

Transaction Type	Pieces per Household per Week			Share 2011
Transaction Type	2009	2010	2011	Share 2011
Business
Bills	2.9	2.6	2.4	42.0%
Bill Payments	1.4	1.3	1.1	18.9%
Statements	1.2	1.0	0.9	15.8%
Confirmations	0.2	0.2	0.2	3.6%
Payments (to HH)	0.4	0.4	0.4	6.6%
Orders	0.1	0.1	0.0	0.8%
Rebates	0.0	0.0	0.0	0.4%
Insurance Related	0.2	0.1	0.4	7.0%
Other Transactions	0.0	0.0	0.1	1.2%
Total Business	6.5	5.9	5.5	96.1%
Social/Charitable
Requests for Donation	0.1	0.1	0.1	1.9%
Donations	0.1	0.1	0.1	1.0%
Bills	0.0	0.0	0.0	0.3%
Confirmations	0.0	0.0	0.0	0.6%
Total Social/Charitable	0.3	0.3	0.2	3.9%
Total Transactions	6.8	6.1	5.8	100.0%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.

Historical data was restated as a result of improvements to the 2011 survey questionnaires, which restated previously unclassified mail.
The increase in the newly created insurance related category is also related to the changes to the questionnaires.

Transactions Mail and
Household Characteristics

The following tables break down transactions mail sent and received by households based on the demographic categories introduced in Chapter 2.

Income, Education, and Age

As seen in Tables 4.2 and 4.3, household income and educational attainment influence the amount of transactions mail sent and received. In most cases, income has a much greater impact on transactions mail received than sent. The basis for this relationship is that higher-income households are more likely to be broadband households and more likely to pay bills through non-mail means. The tables also show that income has a greater impact on transactions mail than education. Better-educated households, on average, have more financial accounts, insurance policies, and credit cards—all generators of transactions mail volume.

Table 4.2:
Transactions 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	2.4	3.1	2.9	3.1	2.9
$35 to $65	4.9	5.0	4.9	4.3	4.8
$65 to $100	5.3	5.5	5.7	5.2	5.4
Over $100	4.5	6.8	6.2	5.8	6.0
Average	3.4	4.4	4.7	5.0	4.6

Source: HDS Diary Sample, FY 2011.

Table 4.3:
Transactions 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	.7	.9	1.0	1.1	.9
$35 to $65	1.7	1.5	1.2	1.1	1.3
$65 to $100	3.0	1.6	1.0	1.1	1.3
Over $100	2.5	1.4	1.5	1.2	1.3
Average	1.3	1.3	1.2	1.1	1.2

Source: HDS Diary Sample, FY 2011.

Tables 4.4 and 4.5 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 because 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 particularly evident for transactions mail sent (primarily bill payments) where households in which the head of household is aged 35 years or younger sent only about one-half and one-third as much mail as households where the head of household is 35 to 54 and over 55 years old, respectively.

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	2.0	2.8	3.3	2.9
$35 to $65	3.7	4.9	5.3	4.8
$65 to $100	4.2	5.5	6.2	5.4
Over $100	4.8	5.8	7.0	6.0
Average	3.3	4.9	5.0	4.6

Source: HDS Diary Sample, FY 2011.

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	.4	.6	1.2	.9
$35 to $65	.7	1.2	1.7	1.3
$65 to $100	.9	1.0	2.1	1.3
Over $100	.6	1.2	1.9	1.3
Average	.6	1.0	1.6	1.2

Source: HDS Diary Sample, FY 2011.

Household Size

In terms of household size, Table 4.6 shows that the increase from a one-person household to a two-person household adds 1.8 pieces of transactions mail per week received and 0.4 pieces per week sent, but a 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	3.0	1.0
Two	4.8	1.4
Three	5.1	1.4
Four	5.4	.9
Five or more	4.9	.9
Average	4.6	1.2

Source: HDS Diary Sample, FY 2011.

For transactions mail received, Table 4.7 shows that one additional adult adds about 1.8 pieces (on average) of mail received per week. However, one additional adult generates only 0.3 pieces of additional mail sent.

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

(Pieces per Household per Week)

Number of Adults in Household	Received	Sent
One	3.0	.9
Two	4.8	1.2
Three or more	5.9	1.5
Average	4.6	1.2

Source: HDS Diary Sample, FY 2011.

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 by the fact that household Internet access is strongly correlated with income and education.

Table 4.8 also shows that the number of transactions sent by households with Broadband is lower than both Dial-up users and households without any Internet access. Broadband’s higher processing speeds provide a strong motivation for households to move financial transactions online or pay more for faster speeds, particularly when it relates to bill payments.

Table 4.8:
Transactions Mail Received and Sent by Internet Access

(Pieces per Household per Week)

Type of Internet Access	Received	Sent
Broadband	4.7	1.1
Dial-up	4.6	1.7
None	3.2	1.3
Average	4.5	1.2

Source: HDS Diary Sample, FY 2011.

Table 4.9:
Income and Education by Type of Internet Access

Type of Internet Access	Median Income	% w/ College Degree
Broadband	67,538	43%
Dial-up	51,080	27%
None	23,139	12%

Source: HDS Diary Sample, FY 2011.

Bill Payment

The total number of bills paid per month per household fell from 11.8 in 2009 to 11.3 in 2011, reflecting, at least in part, an increased amount of account consolidations and account closures resulting from 2011’s weak economic conditions. 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 payment options. The most important of these is electronic bill payment, which, for purposes of this chapter, includes payments made via Internet, automatic deductions from bank accounts, and automatic charges to credit cards.

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

Table 4.10 shows the percentage of households that pay bills by each method and the average number of bills paid per month by each method. About 79 percent of households paid at least one bill by mail. Alternatively, this implies that 21 percent of households no longer paid any of their bills by mail—the highest level reported so far. Other popular bill payment methods were online (used by 53 percent of households) and automatic deductions from bank accounts (55 percent of households). The average number of bills paid by mail per household was 5.0 per month, down 15 percent from 5.9 in 2009. In 2011, only 45 percent of all household payments were made by mail—the lowest share to date.

In 2011, households reported paying more monthly bills electronically (5.7) than by mail (5.0). Additionally, regarding total electronic payments, more payments were made online (3.6) than by all other electronic methods combined (2.2).

In 2011, households reported paying
more bills electronically than by mail.

Table 4.10:
Bill Payment by Method, FY 2009, 2010, and 2011

Bill Payment Method	2009	2010	2011	2011	2011
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	5.9	5.4	5.0	44.7%	79.1%
Automatic Deduction	1.4	1.5	1.5	13.4%	51.2%
Internet	3.3	3.3	3.6	31.9%	55.2%
In-person	.6	.5	.5	4.4%	24.1%
Credit Card	.3	.4	.4	3.4%	18.7%
Telephone	.3	.3	.3	2.3%	12.7%
Total	11.8	11.5	11.3	100.0%	—

Source: HDS Diary Sample, FY 2009, 2010, and 2011.

Historical data for payments by mail was restated as a result of improved 2011 survey questionnaires which restated previously unclassified mail pieces.

As Figure 4.1 shows, electronic methods account for a growing share of household bill payments over time. In fact, since 2000, the average number of bills paid by electronic methods more than quintupled, largely at the expense of the mail, which fell about 45 percent during that time. Table 4.1 also shows the decline in total bill payments over the past few years.

Figure 4.1:
Monthly Average Household Bill Payment by Method

Figure 4.1: Monthly Average Household Bill Payment by Method

Source: HDS Diary Sample, FY 1998-2011.
Note: Other Electronic includes telephone.

Figure 4.2 shows that automatic deductions more than tripled since 1998. Over time, however, the increasing affordability and popularity of Broadband has provided sufficient motivation for some households to transition from automated deductions to online bill payments, in a way similar to the electronic diversion of the mail. As a result, automatic deductions have leveled off in the past few years.

Figure 4.2:
Average Monthly Automatic Deductions per Household

Figure 4.2: Average Monthly Automatic Deductions per Household

Source: HDS Diary Sample, FY 1998-2011.

The types of bills paid by mail are shown in Table 4.11. As mentioned, all types of bills that are paid by mail have been affected by electronic diversion. For each bill type, the share that is paid by mail decreased substantially from 2009. The share of electric bills paid by mail was the largest. In 2011, 47 percent of households paid their electric bills by mail, down from 54 percent in 2009. Similarly, the share of telephone bills paid by mail decreased from 45 percent in 2009 to 43 percent in 2011. All remaining bill types experienced similar declines in the shares paid by mail, leaving them with less than a 50 percent share paid by mail.

The Household Diary Study finds that the number of total bills paid per month varies by age and income, as does the choice of method used for bill payment. Figure 4.3 shows the total average number of bills paid per month for each income and age group.

Table 4.11:
Types of Bills Paid by Mail

Bill Type	Percent of Household
Bill Type	2009	2010	2011
Electric	54%	50%	47%
Telephone	45%	48%	43%
Credit Cards	48%	46%	42%
Insurance	46%	45%	40%
Cable/Satellite TV	47%	42%	40%
Natural Gas/ Propane, etc.	42%	40%	37%
Water/Sewer	40%	39%	37%
Medical	40%	38%	35%
Cell Phone	33%	40%	35%
Rent/Mortgage	32%	29%	28%
Internet Service	33%	29%	26%
Taxes	27%	24%	24%
Car Payment	14%	17%	21%
Other Loans	18%	17%	15%
Alimony/ Child Support	16%	16%	16%

Source: HDS Recruitment Sample, FY 2009, 2010, and 2011.

Figure 4.3:
Average Bills Paid per Month by Income and Age

Figure 4.3: Average Bills Paid per Month Income and Age

Source: HDS Diary Sample, FY 2011.

Unsurprisingly, the number of bills paid per month is positively related to household income. Households with incomes above $100,000 paid an average of 13.9 bills per month in FY 2011, compared to 8.5 bills paid by households with incomes below $35,000.

Age has a slightly different relationship with bill payment levels; younger households (in which the head of household is aged 34 or younger) and older households (in which the head of household is aged 55 or older) pay fewer bills than households in which the head of household is between the ages of 35 and 54.

Younger households pay the majority of their bills electronically. Figure 4.4 shows that the younger the head of a household is the more likely the household will pay bills electronically. Even when comparing just the Internet portion of total electronic payments to mail payments, younger households paid a greater share of bills online than by mail. Younger households paid only 29 percent of their bills by mail and 46 percent online, as compared to older households, who paid 56 percent of their bills by mail and only about 20 percent online.

Figure 4.4:
Bill Payment Method by Age

Figure 4.4: Bill Payment Method by Age

Source: HDS Diary Sample, FY 2011.
Note: Other Electronic includes telephone.

Bills and Statements Received

Table 4.12 shows the overall volume of bills and statements received. In FY 2011, about 43 percent of First-Class Mail received by households was bills and statements. Households received 14.9 billion bills in FY 2011, a 16 percent decline from 2009 (17.8 billion), partly because of account closures associated with the recession and increasing account consolidations. The largest volumes of bills originated from credit card companies (3.9 billion), utilities (2.4 billion), telephone/cable companies (2.4 billion), medical and professional companies (1.9 billion), and insurance companies (1.5 billion).

Statements received were predominantly sent by the financial sector, including banks, insurance companies, and other financial institutions.

As with bills, the volume of statements households received fell to 5.6 billion from 7.3 billion pieces in 2009, a decrease of 23 percent. In addition to account closures, statements also declined as financial institutions, in an effort to reduce costs, continued to move from monthly to quarterly statement mailings.

Table 4.12:
Bill and Statement Volumes by Industry

Industry	Volumes
Industry	Bills *(Millions)*	Statements *(Millions)*
Financial
Bank, S&L, Credit Union	1,099	2,782
Credit Card	3,899	4
Insurance Company	1,448	261
Real Estate/Mortgage	290	91
Other Financial	109	1,645
*Total Financial*	6,845	4,783
Merchants
Department Store	31	3
Publisher	319	1
Mail Order Company	78	2
Other Merchants	143	65
*Total Merchants*	571	71
Service
Telephone/Cable Company	2,355	20
Utility Company	2,396	18
Medical and Other Professional	1,896	124
Other Service	413	22
*Total Service*	7,059	183
Manufacturers	32	21
Government	398	533
Social/Nonprofit	0	0
Other/Don’t Know/Refused	20	26
*Total – All Industries*	14,927	5,618

Source: HDS Diary Sample, FY 2011.

As shown in Figure 4.5, between 2009 and 2011, the total number of statements received by mail decreased for all household income categories.

Table 4.13 shows the average volume of bills and statements received by mail and online. For reasons described earlier, the number of bills and statements households received through the mail decreased almost 17 percent, on a per household basis, compared to 2009. The number of bills and statements received via Internet, on the other hand, increased by 17 percent, albeit from a small base.

Figure 4.5:
Statements Received by Mail by Income

Figure 4.5: Statements per Household per Week Figure 4.5: Statements Received by Mail by Income

Source: HDS Diary Sample, FY 2009, 2010, and 2011. Amounts are rounded.

Table 4.13:
Average Monthly Bills and Statements Received by Method

Method	2009	2010	2011
Mail	17.4	15.6	14.4
Internet	2.4	2.4	2.8
Total	19.75	18.12	17.25

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes: Internet averages use HDS Diary Sample.
Mail includes Bills and Statements.

Image of a rectangle 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 Magna Advertising Group, American businesses spent about $174 billion in 2011 advertising their products and services, which represents a 1.6 percent increase following a 4.5 percent spending increase in 2010. Of this total advertising spending, 12 percent was spent on direct mail (note that Magna’s spending estimates for direct mail include only postage costs).

As in prior years, direct mail was one of the leading media choices of advertisers in 2011. However, the weak economic recovery stimulated only a 1.0 percent increase in direct mail advertising spending over 2010. As shown in Table 5.1, Internet advertising had, by far, the strongest spending growth compared to all other media categories.

Table 5.1:
U.S. Advertising Spending Growth by Medium, 2009-2011

(Percent Growth from Prior Year)

Medium	2009	2010	2011
Direct Mail	-15.4	3.8%	1.0%
Newspapers	-28.6%	-8.2%	-9.9%
Television	-10.5%	12.4%	1.2%
Radio	-19.4%	4.8%	0.7%
Magazines	-20.4%	0.1%	-1.2%
Internet	-3.4%	14.9%	21.4%
All Other	-18.3%	-12.3%	-9.6%
Total	-16.0%	4.5%	1.6%

Source: Magna Advertising Group—estimates.
Note: Totals may not sum due to rounding.

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, and 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 expeditious, personalized First-Class mailings against cost-savings from Standard Mail.

Importantly, the effectiveness of direct mail is readily measurable, more so than for most other media. 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 other media.

Figure 5.1 shows that, according to Magna’s estimate of postage costs, direct mail’s share of total advertising spending has remained relatively constant at 12 percent for most of the past 20 years. Direct mail has maintained its strong ad share, even with the introduction of new and fast-growing ad markets such as the Internet.

Figure 5.1:
Direct Mail as a Share of Total Advertising, 1990-2011

Figure 5.1: Direct Mail as a Share of Total Advertising, 1990-2011

Source: U.S. Postal Service calculations based on Magna Advertising Group data.

Advertising Mail Volumes

In 2011, advertising mail represented 61 percent of all household mail. Households received 85.1 billion pieces of advertising mail, 1.8 percent more than in 2010 but still slightly less than in 2009. The growth over 2010 was driven almost entirely by a rebound in credit card advertising; mailing by most other industries continued a decline which began with the last recession.

As shown in Table 5.2, First-Class advertising mail accounts for 12.6 billion pieces (14.8 percent of all advertising mail received by households). Of this volume, 5.3 billion pieces are advertising-only, while the other 7.4 billion pieces are secondary advertising pieces. These pieces, also referred to as advertising-enclosed mail, are typically included in the volume totals of the primary piece, be it a bill, statement, or correspondence mailing.

In 2011, First-Class advertising-only mail declined almost 15 percent from 2010, continuing a downward trend that began in 2007, just prior to the last recession. Weak economic conditions that followed encouraged mailers to rely more heavily on Standard Mail advertising, a less costly alternative to First-Class Mail.

Advertising mail represented
61 percent of all mail received
by households in 2011.

About 85 percent (72.4 billion pieces) of all advertising mail received by households in 2011 was sent via Standard Mail. This represents a 2.5 percent increase compared to both 2010 and 2009, and was primarily driven by strong growth in credit card solicitations.

Prior to the last recession, direct mail advertising experienced a trend of strong, continuous growth, as there had been only one postal rate increase in over five years and spending was growing along with a stronger overall economy.

Standard Mail accounts for
85 percent of total
household advertising mail.

Table 5.2: Advertising Mail by Mail Classification

(Volume in Billions of Pieces)

Mail Classification	Volume (Billions of Pieces)			Growth, 2009-2011
Mail Classification	2009	2010	2011	Growth, 2009-2011
First-Class Advertising	14.5	12.9	12.6	-12.9%
Advertising Only	6.6	6.2	5.3	-20.9%
Secondary Advertising	7.8	6.7	7.4	-6.1%
Standard Mail	70.6	70.6	72.4	2.5%
Regular and ECR	58.2	58.5	60.3	3.7%
Nonprofit	12.5	12.1	12.0	-3.4%
Unsolicited Packages	0.1	0.1	0.1	1.8%
Total Advertising	85.2	83.6	85.1	-0.1%
Unaddressed Mail	1.6	1.7	1.1	-33.8%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes: Totals may not sum due to rounding. Unaddressed Mail is not included in totals.

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	2009	2010	2011	Share of Total
First-Class Advertising	2.4	2.1	2.0	14.8%
Advertising Only	1.1	1.0	0.9	6.2%
Secondary Advertising	1.3	1.1	1.2	8.6%
Standard Mail	11.6	11.5	11.7	85.1%
Regular and ECR	9.5	9.6	9.8	70.9%
Nonprofit	2.0	2.0	2.0	14.1%
Unsolicited Periodicals/Packages	0.0	0.0	0.0	0.1%
Total Advertising	14.0	13.7	13.8	100.0%
Unaddressed Mail	0.3	0.3	0.2	1.3%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Note: Totals may not sum due to rounding. Unaddressed Mail is not included in totals.

Advertising Mail and Household Characteristics

Income, Education, and Age

As advertising mail is used to sell goods and services, it is not surprising that the amount of ad mail received by a household is closely tied to income and education.

The relationship between advertising mail and household income is quite strong, as seen in Table 5.4. Households with incomes of $100,000 or more receive almost three times as much mail as households with income of less than $35,000 (22.8 pieces per week compared to 8.5). Table 5.4 also shows that education plays a key role in the amount of advertising mail households receive, even after accounting for the effect education has on income.

For example, among households earning less than $35,000, ad mail received per week increases as the educational status of the head of the household increases, rising from 6.9 pieces per week for households headed by someone without a high school degree to 9.8 pieces per week for households headed by a college graduate. With exception of higher income households without a high school diploma (likely to represent successful entrepreneurs who receive large volumes of business-related ad mail), the pattern is repeated across all income groups, with more ad mail received as education increases.

The role that education plays in advertising mail is two-fold. First, direct mail is a written type of communication, and education may play some role in its relative effectiveness compared to television or radio advertising. Second, education is not only tied to current household income, but also to future household income. A college graduate who currently has a relatively low income may, in a few years, earn a much higher income.

Table 5.4: Advertising Mail Received by Income and Education

(Pieces per Household per Week)

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	6.9	8.8	9.1	9.8	8.5
$35 to $65	7.7	11.4	13.8	11.1	11.4
$65 to $100	32.6	16.8	13.2	18.8	17.2
Over $100	24.9	19.0	21.7	23.8	22.8
Average	9.2	12.3	13.4	17.3	13.9

Source: HDS Diary Sample, FY 2011.

Table 5.5 shows that households headed by older people receive more advertising mail than those headed by younger people. For every income group, advertising mail received increases as the age of the head of the household increases. In part, this is because age is correlated with other characteristics such as marriage, home ownership, and the presence of children in the household.

Moreover, the older a person is, the longer his or her buying history and the more businesses with which the person has a relationship that advertising mail can help maintain. Those households with incomes greater than $100,000 and with a head of household aged 55 and older received the greatest number of advertising mail pieces at 23.4 pieces per week.

The amount of advertising mail received increases as income, education,
and household size increases.

Table 5.5:
Advertising Mail Received 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	5.1	7.5	10.5	8.4
$35 to $65	8.8	11.8	15.4	12.7
$65 to $100	12.2	14.9	18.0	15.2
Over $100	18.8	20.3	23.4	21.0
Average	9.8	14.4	15.3	13.8

Source: HDS Diary Sample, FY 2011.

Household Size

Tables 5.6 and 5.7 show advertising mail received increases as the household size and number of adults in the household increase. While this is evident in looking at changes in household size (except when there are five or more household members), the greatest change in the number of pieces of advertising mail received is seen in the number of adults in the households.

Table 5.6:
Advertising Mail Received by Size of Household

(Pieces per Household per Week)

Household Size
One person	10.3
Two	14.6
Three	14.5
Four	15.4
Five or more	14.0
Average	13.8

Source: HDS Diary Sample, FY 2011.

As shown in Table 5.7, households with three or more adults receive 60 percent more advertising mail than a household with only one adult. This represents an increase from an average of 10.3 pieces per week to 16.3 pieces per week. Note, however, that most of this increase occurs when the number of adults increases from one to two, indicating a strong impact stemming from the likelihood of it being a two-income household.

Table 5.7:
Advertising Mail Received by Number of Adults

Number of Adults
One	10.3
Two	14.4
Three or more	16.3
Average	13.8

(Pieces per Household per Week)

Source: HDS Diary Sample, FY 2011.

Internet Access

Finally, Table 5.8 shows the relationship between advertising mail received and Internet access. Despite all the attention paid to online and e-mail advertising, households with Internet access receive more advertising mail than those without access.

To a large degree, this reflects other household characteristics; as shown in Table 5.9, Internet access is closely tied to income and education. However, advertising mail is sent even when new advertising media are available. In addition, Table 5.8 may demonstrate the use of Internet information to target potential customers through direct mail advertising. Conversely, direct mail is often used as a complement to the Internet by directing potential customers to specific company websites.

Table 5.8:
Advertising Mail Received by Internet Access

(Pieces per Household per Week)

Type of Internet Access
Broadband	14.2
Dial-up	13.7
None	10.1
Average	13.8

Source: HDS Diary Sample, FY 2011.

Table 5.9:
Income and Education by Type of Internet Access

Type of Internet Access	Median Income	% w/ College Degree
Broadband	67,538	43%
Dial-up	51,080	27%
None	23,139	12%

Source: HDS Diary Sample, FY 2010.

Senders of Advertising Mail

Figure 5.2 provides data on the senders of advertising mail to households. Merchants continue to be the largest senders; in 2011, they sent 36 percent of Standard advertising mail and 18 percent of First-Class advertising mail. Financial firms are the second largest sender of Standard Mail advertising (27 percent) and (along with the service sector) the largest sender of First-Class advertising (38 percent).

Figure 5.2:
Advertising Volumes for First-Class and Standard Mail Advertising by Sender Type

Figure 5.2: Advertising Volumes for First-Class and Standard Mail Advertising by Sender Type

Source: HDS Diary Sample, FY 2011.
Base: First-Class and Standard Advertising Mail Pieces excluding Unsolicited Samples, Multiple Organizations,
and Don’t Know/No Industry given.

Attitudes toward Advertising

With $174 billion spent in the United States on advertising, few households would probably wish they received more.

Whether they wish to receive more or not, most households either read or at least scan their advertising mail. Figure 5.3 shows 53 percent of households usually read their advertising mail, while an additional 25 percent scan their mail. Only 21 percent of households report they do not usually read their advertising mail. This represents an increase from the nine percent who did not usually read advertising mail in 1987. Given the large increase in advertising mail volumes since then, it is clear that U.S. households read more advertising mail now than in the past.

Seventy eight percent of households
either read or scan advertising mail
sent to their household.

Figure 5.3:
Advertising Mail Behavioral Trends, FY 1987, 2009, 2010, and 2011

Figure 5.3: Advertising Mail Behavioral Trends, FY 1987, 2009, 2010, and 2011

Source: HDS Recruitment Sample, FY 1987, 2009, 2010, and 2011.
Note: Percentages do not include those who did not provide a response.

Interestingly, the survey shows that not all advertising is treated equally. Figure 5.4 shows that catalogs attract more attention than credit card advertising, as they are usually more interesting to read. Forty-eight percent of households read catalogs, and only 24 percent discard them without reading them. In contrast, 48 percent of households read credit card advertising, but 42 percent discard them without reading them.

Figure 5.4:
Treatment of Standard Mail by Type

Figure 5.4: Treatment of Standard Mail by Type

Source: HDS Diary Sample, FY 2011.
Note: Percentages do not include those who did not provide a response.

Another interesting result is found in Figure 5.5. Household behavior toward advertising mail is largely independent of how much advertising mail the household receives. For example, among households that receive zero to seven pieces of advertising mail per week, 47 percent usually read all or some of the mail, and 18 percent usually do not read any. Among households that receive eighteen or more pieces per week, 49 percent usually read all or some, and 16 percent usually do not read any.

Thus, households that receive more advertising mail than others do not appear to be particularly “turned off” by the high volume. However, Figure 5.5 also shows that, when looked at separately, the percentage of households that usually read all advertising does decrease as the number of pieces increases. When only seven or fewer pieces are received, 19 percent of households usually read all the advertising mail they receive. When 18 or more pieces are received, only 10 percent of households usually read all the advertising mail.

Figure 5.5:
Treatment of Standard Advertising Mail by Number of Standard Mail Pieces Received per Week

Figure 5.5: Treatment of Standard Advertising Mail by Number of Standard Mail Pieces Received per Week

Source: HDS Diary Sample, FY 2011.

Effectiveness of Advertising Mail

Ultimately, advertisers send direct mail because it works—household members read and respond to it. Table 5.10 presents the intended response of households to advertising mail. Households report they intend to respond to about one in ten pieces of advertising mail, with the intended response to both First-Class and Standard Mail advertising being 12 percent. The table also shows that households say they may respond to another 17 percent of Standard advertising and 11 percent of First-Class advertising. This is not to say that a similar mail piece would receive a higher response rate if mailed via Standard Mail; it is more likely the result of a different mix of advertising in Standard Mail. For example, catalogs, which typically enjoy a high response rate, are routinely mailed Standard Mail but are infrequently mailed First-Class. Credit card advertising pieces, on the other hand, have the lowest response rate and are often mailed First-Class.

Figure 5.6 presents the total number of intended responses to advertising mail by income. As illustrated in Tables 5.4 and 5.5, higher-income households received more advertising mail. Figure 5.6 combines the data on the amount of advertising mail received by household income with the household’s intended response to the mail. The result is the average number of intended responses per week for each income level. For example, households with incomes greater than $150,000 report they intend to respond to 2.3 pieces of advertising mail per week, and they may respond to another 4.1 pieces per week. Other high-income households also indicated they will respond to more than one piece of advertising mail per week, as do some of the lower-income households.

While intended responses do not always lead to actual responses, the data presented in Table 5.10 and Figure 5.6 help explain why direct mail is such a popular choice of advertisers in America. Although there is no completely equivalent measure for intended response to Internet ads, the click-through rate (the percentage of online visitors who viewed an ad and also clicked on it) is widely used as an indicator of consumers’ interest in online ads. As such, it is somewhat comparable to mail ads’ read rates. Based on published reports, the average click-through rate for Internet advertising is about 5 percent. Overall read rates for mail ads, on the other hand, have averaged about 50 percent.

Table 5.10: Intended Response to Advertising Mail by Class

(Percentage of Pieces)

Response	First-Class	Standard
Yes	12%	12%
Maybe	11%	17%
No	58%	62%
No Answer	18%	8%

Source: HDS Diary Sample, FY 2011.

Figure 5.6:
Weekly Number of Intended Responses by Income

Figure 5.6: Weekly Number of Intended Responses by Income

Source: HDS Diary Sample, FY 2011.

Image of rectangle Chapter 6: Periodicals

Introduction

This chapter examines periodicals sent to households. Periodical Mail consists of newspapers or magazines regularly sent to households, usually as part of a subscription. This chapter analyzes only periodicals delivered by the Postal Service to households. Newspapers or magazines delivered by a local carrier or purchased at a newsstand or store are not included in Household Diary Study data. The volumes examined here are only a portion of the total periodicals volume, since some of periodicals are received by non-households, such as doctors’ offices or other businesses.

The Internet has become an
increasingly accepted substitute
for hard-copy publications.

The Periodicals Market

Historically, Periodical Mail volume has not kept pace with population growth, as seen in Figure 6.1. Since the 1990s, as demographics changed, people began to read less than they did a few decades ago. Periodical volumes reached a peak in 1990 at 10.7 billion pieces, but have declined each year since then, with the exception of FY 2000. In that year, periodical volumes were temporarily buoyed by an influx of advertising revenue during the dot-com boom.

After the recession that began in 2001, periodicals volumes slipped not only because of reduced subscriptions, but also because of the number of publications that ceased operation as their sources of advertising revenue dried up. Since then, in addition to a general demographic shift away from reading, periodicals’ volume continued to decline as the Internet became an increasingly accepted substitute for hard-copy publications. Since 2008, the decline was further aggravated by the impact of the severe recession and a weak recovery.

Figure 6.1:
Periodicals Mail Volume per Person, 1971-2011

(Annual Pieces per Person)

Figure 6.1: Periodicals mail Volume per Person, 1971-2011

Source: U.S. Postal Service RPW Reports, U.S. Census Bureau.

Advertising’s Impact on Periodicals

Advertising spending translates into advertising revenue, and the key determinant of periodicals profitability is advertising revenue.

Advertising is a form of business investment. As with other investments, when the economy takes a turn for the worse, advertising tends to slow. By 2000, total advertising as a percent of Gross Domestic Product (GDP) rose to a historically high level; when the high-tech bubble burst, advertising crashed. In 2002, albeit at a slower pace, total advertising spending resumed its growth, and, after six years of economic expansion, reached a new record high. After 2006, however, advertising spending suffered its largest decline in history and, by 2009, fell more than 20 percent. Since 2010,,advertising spending increased 6.3 percent, aided by a slow economic recovery.

Magna Advertising Group projects that advertising spending will continue to grow, starting with a 2.4 percent increase in 2012. As the economy continues to recover, it typically would encourage advertising spending, which, in turn, should bode well for magazines. More magazines in circulation would translate into higher volume for the Postal Service, since, for most titles, the mail remains the primary distribution channel. The Internet, however, has become a strong competitor of hard-copy publications. The Internet provides an alternative channel for news, information, and entertainment. As a consequence, periodical volumes may be headed toward long-term decline, regardless of the state of the economy.

Figure 6.2 shows the sharp decline in real per capita advertising spending for magazines that started in 2001 due to the recession. Annual spending growth resumed in 2004 but only lasted two years. The recession, which started in 2007, sent magazine advertising plummeting to the lowest level in a decade, drastically shrinking the revenues and profitability of the magazine industry. In 2010 spending remained constant but in 2011 it resumed the decline.

Figure 6.2:
Real Per-Capita Magazine Advertising Spending, 1980-2011

Figure 6.2: Real Per-Capita magazine Advertising Spending, 1980-2011

Source: Magna Advertising group, U.S. Census Bureau.

Household Periodicals Volume

As shown in Table E.2 of the Executive Summary, periodicals represent 3.9 percent of all household mail volumes. Table E.2 also shows that the volume of periodicals continued to decline over the past three years. In FY 2011, households received 5.4 billion periodicals, compared to 5.5 billion in FY 2010 and 6.0 in FY 2009.

Table 6.1 shows the breakdown of periodicals received by households. Seventy-eight percent of all periodicals received by households were magazines. In contrast, in 1987, the share of magazines was 59 percent.

In 2011, households received an average of 0.7 magazines per week. The most common type of magazine is monthly, accounting for 57 percent of total magazines.

Newspapers make up 11 percent of total periodicals volume, down from a 35 percent share in 1987. The number of newspapers received per household each week declined from 0.6 in 1987 to only 0.1 in 2011, while magazines only declined from 1.0 to 0.7 pieces per week.

The decline in newspapers captured in the Household Diary Study mirrors the behavior seen in overall newspaper circulation.

As shown in Figure 6.3, newspaper circulation in general has declined significantly since 1990. Of course, on a per capita basis, the decline is even more pronounced.

Table 6.1:
Periodical Type by Year

(Pieces per Household per Week)

Periodical Type	1987	2010	2011
Newspapers	.6	.2	.1
Daily	.2	.0	.0
Weekly	.3	.1	.1
Other	.1	.0	.0
Magazines	1.0	.7	.7
Weekly	.3	.1	.1
Monthly	.6	.4	.4
Other	.1	.1	.1
Unclassified	.1	.1	.1
Total Periodicals	1.7	.9	.9

Source: HDS Diary Sample, FY 1987, 2010, and 2011.
Note: Totals may not sum due to rounding.

Figure 6.3:
Newspaper Circulation, 1970-2009*

Figure 6.3: Newspaper Circulation, 1970-2009*

Source: Newspaper Association of America.
* InformationiIs only available through 2009.

Figure 6.4:
Daily Newspaper Readership, 1987-2011

Figure 6.4: Daily Newspaper Readership, 1987-2011

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 44 percent in 2011, after a slight increase in 2010.

Daily newspaper readership overall
has declined significantly since 1987.

Declining newspaper readership and circulation are not the only contributors to the falling volume of newspapers received via mail by households. With current technology and alternate delivery systems, national newspapers, such as the Wall Street Journal and The New York Times, deliver their papers to prime urban and suburban household customers before breakfast. Local printing/ distribution and morning delivery mean these copies of these publications 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 in which the head of the household has a college education receive the most periodicals, averaging 1.1 per week. Similarly, households with an income above $100,000 receive an average of 1.4 periodicals per week, almost three times what households earning less than $35,000 receive.

Households with incomes above $100,000
receive almost three times 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 years old and with incomes less than $35,000, the average is only 0.3 pieces per week. Households with income above $100,000 and whose heads are over 55 receive the most periodicals, with almost two pieces per week.

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	.4	.5	.6	.6	.5
$35 to $65	.5	.8	.6	.9	.7
$65 to $100	.7	.9	1.0	1.0	1.0
Over $100	1.7	1.3	1.1	1.5	1.4
Average	.5	.8	.8	1.1	.9

Source: HDS Diary Sample, FY 2011.

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	.3	.3	.7	.5
$35 to $65	.4	.6	1.0	.7
$65 to $100	.6	.9	1.3	1.0
Over $100	1.0	1.3	1.9	1.4
Average	.5	.8	1.1	.9

Source: HDS Diary Sample, FY 2011.

Household Size

Table 6.4 and Table 6.5 show that as households increase in size from one to two persons, periodicals volume increases. Households with more than two persons receive slightly fewer periodicals than two-person households. In households with two adults, periodicals volume is higher than in one-person households, but the presence of additional adults beyond two has no significant effect on receiving periodicals.

Table 6.4:
Periodicals by Size of Household

(Pieces per Household per Week)

Household Size
One person	.6
Two	1.0
Three	.8
Four	.9
Five or more	.9
Average	.9

Source: HDS Diary Sample, FY 2011.

Table 6.5:
Periodicals by Number of Adults in Household

(Pieces per Household per Week)

Number of Adults
One	.6
Two	.9
Three or more	1.0
Average	.9

Source: HDS Diary Sample, FY 2011.

Internet Access

As with many other types of mail, wired households receive more periodicals through the mail, as shown in Table 6.6. And, as with those other types of mail, this is largely the result of the correlation between income, education, and Internet access (see Table 6.7). As households’ access to the Internet and Broadband becomes more widespread, even more periodical content will be delivered electronically, rather than by mail. More recently, the emergence of portable electronic devices (such as e-readers) designed primarily for reading digital books and periodicals may have contributed to the reduction in the number of periodicals moving through the mail.

Table 6.6:
Periodicals by Type of Internet Access

(Pieces per Household per Week)

Type of Internet Access
Broadband	.9
Dial-up	.9
None	.7
Average	.9

Source: HDS Diary Sample, FY 2011.

Table 6.7:
Income and Education by Type of Internet Access

Type of Internet Access	Median Income	% w/ College Degree
Broadband	67,538	43%
Dial-up	51,080	27%
None	23,139	12%

Source: HDS Diary Sample, FY 2011.

Subscription Type

Figure 6.5 provides an overview of subscription type for FY 1987, FY 2010, and FY 2011. As shown, the distribution of subscription type has remained relatively stable over the last two years and similar to the 1987 distribution. In 2011, a household member ordered and paid for 44 percent of total periodicals sent to households. An additional 35 percent were free—either ordered by a household member or delivered to the household without a freestanding order, for example, as a prerogative of membership in a professional, fraternal, or religious organization.

Figure 6.5:
Subscription Type by Year

Figure 6.5: Subscription Type by Year

Source: HDS Diary Sample, FY 1987, 2010, and 2011.
Base: Total Periodicals Mail volume – RPW.
Note: Percentages do not add to 100 due to the exclusion of periodicals sent to non-households and those to
which no response was given as to subscription type.

Examining these volumes by sender type shows that commercial organizations sent much more than any individual member organization. Member organizations are professional affiliations; charitable, religious, and veterans’ organizations; educational groups; and unions.

As shown in Table 6.8, member organizations, when combined, account for 18 percent of total periodicals received by households.

Table 6.8:
Periodicals by Sender Type

Sender Type	Pieces per Household per Week	Percent of Periodicals Received by HH
Commercial Organization	.71	82%
Professional Organization	.06	7%
Religious Organization	.03	3%
Educational Organization	.03	3%
Union	.01	2%
Charitable Organization	.01	1%
Veterans’ Organization	.01	1%
Unclassified	.01	2%
Total	.87	100%

Source: HDS Diary Sample, FY 2011.

Volume Drivers

A number of factors influence a household’s receipt of periodicals. Several of these variables are demographic, while others are more behavioral in nature. In the past, income seemed to influence volume strongly, since periodicals are usually received through a paid subscription.

Typically, higher-income households subscribe to more magazines and newspapers. In 2011, the number of periodicals per household continued a long-term decline for the lower- and middle-income groups, but, more recently, it increased for the higher-income group, as shown in Figure 6.6

Figure 6.6:
Number of Periodicals Received per Week by Households by Income Group

Figure 6.6: Number of Periodicals Received per Week by Households by Income Group

Source: HDS Diary Sample, FY 1978, 1987, 1995, and 2011.

Image of a rectangle Chapter 7: Packages

Introduction

This chapter discusses packages sent and received by households. 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 sent as Standard Mail.

The Package Market

The package delivery market is an important segment of the economy. Between 2001 and 2007, the total volume increased 8 percent. However, starting with 2008, packages declined with the economy and the severe recession. After falling 11 percent by the end of 2009, total package volume recovered and increased almost 7 percent from 2009 to 2011. Over that time, however, the 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 on the next page shows the volume and growth rates of the three segments of the package delivery market. Between the early 1980s and 2000, the overall market grew, driven by growth in the overnight and in the two-day and three-day air segments. This growth was largely because of the expansion of 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- 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 10 years (see Figure 7.1 on the next page). In 2005 and 2006, the recovering economy and the emergence of e-commerce boosted all segments of the package market. Starting in 2007, however, the instability of fuel prices and the recession that followed contributed to decreases in all markets. The overnight market was hit particularly hard in this recession. Since 2007, overnight volume has declined 23 percent. In 2011, all market segments improved sufficiently to end the year with positive growth.

In 2011, package volume increased 4.5 percent to 8.1 billion pieces.

While many carriers serve the package delivery market, FedEx, UPS, and the U.S. Postal Service are the largest players.

Table 7.1:
Total Package Market Volume Growth

(Units in Millions)

Fiscal Year	Overnight Air		Two- & Three-Day Air		Ground		Total
	Overnight Air		Two- & Three-Day Air		Ground		Total
	Volume	Percent Growth	Volume	Percent Growth	Volume	Percent Growth	Volume	Percent Growth
2001	1,126	-2.90%	2,135	-4.10%	4,555	-0.40%	7,815	-1.80%
2002	1,063	-5.60%	1,980	-7.30%	4,578	0.50%	7,621	-2.50%
2003	1,062	-0.10%	1,842	-7.00%	4,737	3.50%	7,642	0.30%
2004	1,044	-1.70%	1,873	1.70%	4,931	4.10%	7,848	2.70%
2005	1,055	1.10%	1,931	3.10%	5,107	3.60%	8,094	3.10%
2006	1,071	1.50%	2,010	4.00%	5,253	2.90%	8,333	3.00%
2007	1,051	-1.80%	1,966	-2.20%	5,438	3.50%	8,455	1.50%
2008	997	-5.20%	1,869	-4.90%	5,527	1.60%	8,393	-0.70%
2009	828	-17.00%	1,734	-7.20%	5,052	-8.60%	7,613	-9.30%
2010	810	-2.20%	1,721	-0.70%	5,225	3.40%	7,756	1.90%
2011	816	0.80%	1,810	5.10%	5,481	4.90%	8,107	4.50%

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

Figure 7.1:
Package Delivery Market Segment Share

Figure 7.1: Package Delivery Market Segment Share

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 increased thirteen percent in FY 2011 over 2010, after remaining virtually unchanged between 2009 and 2010.

Households received 3.0 billion packages in FY 2011 and sent 1.1 billion, as seen in Table 7.2. When the combined volumes, excluding Standard, are compared to FY 2009, packages (shipped via First-Class or Package and Shipping Services) sent and received by households increased 16 and 12 percent respectively in FY 2011. First-Class packages sent and received increased by 13 percent compared to 2009, driven by growing CD/DVD rentals. Standard Mail packages increased almost 15 percent compared to 2009.

Table 7.2:
Postal Service Sent and Received Packages, FY 2009, 2010, and 2011

(Units in Millions)

Mail Classification	Volume (Millions of Pieces)
	2009		2010		2011
	Sent	Received	Sent	Received	Sent	Received
First-Class	814	1,300	803	1,245	969	1,424
Standard Mail	—	583	—	620	—	667
Package & Shipping Services	144	802	172	808	143	920
Unclassified	0	0	0	0	0	2
Total Packages	958	2,685	975	2,673	1,112	3,013
Mail Classification	Percent of Pieces
	2009		2010		2011
	Sent	Received	Sent	Received	Sent	Received
First-Class	85%	48%	82%	47%	87%	47%
Standard Mail	—	22%	—	23%	—	22%
Package & Shipping Services	15%	30%	17%	30%	13%	30%
Unclassified	0%	0%	0%	0%	0%	0%
Total Packages	100%	100%	100%	100%	100%	100%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes: First-Class Packages include 1.6 billion pieces of CD/DVD rentals sent and received reported in First-Class Mai
letters in Tables E.1, 1.5,and 1.6.
Percentages may not sum to 100 due to rounding.
Totals include approximately 300 million pieces of household-to-household packages that are counted in both sent and received.

Packages and
Household Characteristics

Income, Education, and Age

According to the HDS, high-income households sent and received more packages than their less affluent counterparts in FY 2011, as shown in Figure 7.2.

In fact, households in the highest income bracket received more than three times the number of packages received by households with incomes below $35,000. The highest income households also sent over two times as many packages as the lowest income households. For the two higher income categories, households headed by younger people on average received more packages than those with heads of household over 55 years old, as shown in Table 7.3. This may be the case because young heads of households make more online purchases than those who are older. When it comes to sending packages, Table 7.4 shows younger households, in all cases, again sent significantly more packages than the older household group.

Figure 7.2:
Postal Service Sent and Received Packages by Household Income

(Pieces per Household per Week)

Source: HDS Diary Sample, FY 2011.
Base: Packages Sent and Received by Households and Delivered by
U.S. Postal Service.

Table 7.3:
Postal Service Received Packages 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	.20	.26	.24	.25
$35 to $65	.34	.43	.52	.44
$65 to $100	.64	.55	.59	.59
Over $100	.91	.75	.69	.76
Average	.49	.52	.45	.49

Source: HDS Diary Sample, FY 2011.

Table 7.4:
Postal Service Sent Packages 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	.08	.17	.06	.10
$35 to $65	.15	.28	.10	.17
$65 to $100	.19	.22	.16	.19
Over $100	.21	.24	.17	.21
Average	.15	.22	.11	.16

Source: HDS Diary Sample, FY 2011.

The Household Diary Study indicates that households whose heads have college degrees tend to receive and send more packages on average than households with lower educational attainment. These results are shown in Tables 7.5 and 7.6.

Table 7.5:
Postal Service Received Packages by Income and Education

(Pieces per Household per Week)

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	.10	.22	.32	.49	.25
$35 to $65	.22	.38	.50	.54	.44
$65 to $100	.56	.52	.55	.65	.59
Over $100	.48	.85	.67	.77	.76
Average	.22	.39	.49	.66	.49

Source: HDS Diary Sample, FY 2011.

Table 7.6:
Postal Service Sent Packages by Income and Education

(Pieces per Household per Week)

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	.05	.09	.15	.12	.10
$35 to $65	.00	.12	.23	.24	.17
$65 to $100	.01	.23	.16	.22	.19
Over $100	.00	.12	.12	.26	.21
Average	.04	.13	.16	.23	.16

Source: HDS Diary Sample, FY 2011.

Household Size

The Household Diary Study shows that larger households tend to receive and send more packages than smaller households, as shown in Table 7.7.

Table 7.7:
Postal Service Received and Sent Packages
by Size of Household

(Pieces per Household per Week)

Household Size	Received	Sent
One person	.36	.12
Two	.50	.18
Three	.51	.13
Four	.61	.20
Five or more	.48	.17
Average	.49	.16

Source: HDS Diary Sample, FY 2011.

Table 7.8:
Postal Service Received and Sent Packages
by Number of Adults in Household

(Pieces per Household per Week)

Number of Adults	Received	Sent
One	.35	.12
Two	.52	.19
Three or more	.58	.11
Average	.49	.16

Source: HDS Diary Sample, FY 2011.

Internet Access

Access to the Internet seems to play an important part in determining the number of packages sent and received by households. Table 7.9 shows the packages sent and received by households with and without Internet access. In FY 2011, households with Broadband sent more than six times and received almost two times as many packages as households without Internet access. These relationships probably reflect the correlation between income, education, and Internet access, as shown in Table 7.10.

In FY 2011, households with Internet access sent and received more packages than households without Internet access.

Table 7.9:
Received and Sent Packages
by Household Internet Access

(Pieces per Household per Week)

Type of Internet Access	Received	Sent
Broadband	.55	.19
Dial-up	.51	.13
None	.21	.03
Average	.49	.16

Source: HDS Diary Sample, FY 2011.

Table 7.10:
Income and Education by Type of Internet Access

Type of Internet Access	Median Income	% w/ College Degree
Broadband	67,538	43%
Dial-up	51,080	27%
None	23,139	12%

Household Package Contents

As shown in Table 7.11, packages received by households most often contain music/videos, pharmaceuticals, books, and clothes—a sign that online purchases and mail-order retail are the primary drivers of household package volume.

In fact, online purchases contributed to a significant growth in music/video contents received. The share of this type of content remained very strong in 2011, at almost 40 percent of all contents, primarily because of volumes generated by video rental outfits like Netflix.

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

Table 7.11:
Contents of Postal Service Sent and Received Packages

Contents	Volume (Millions of Pieces)
	2009		2010		2011
	Sent	Received	Sent	Received	Sent	Received
Music/Video	750	1,040	734	983	906	1,154
Pharmaceuticals/Contacts	6	254	6	245	2	306
Books	34	295	31	233	29	290
Clothing	32	173	59	231	45	278
Household/Kitchen/Lawn and garden products	24	93	16	111	33	188
Electronic equipment	26	61	21	72	16	90
Toys	16	57	13	45	31	71
Cosmetics/Beauty products/Toiletries	3	94	15	85	5	67
Checkbooks	0	49	0	60	0	59
Food Products	2	67	3	49	0	54
Computer hardware, software, or accessories	8	35	10	38	13	53
Photos/Film	3	40	1	38	0	34
Travel products and information	3	21	3	33	4	24
Other Contents	54	481	74	519	36	564
Total Packages	958	2,685	975	2,673	1,112	3,013

Table 7.11:
Contents of Postal Service Sent and Received Packages (cont.)

Contents	Percent of Pieces
	2009		2010		2011
	Sent	Received	Sent	Received	Sent	Received
Music/Video	78%	39%	75%	37%	81%	38%
Pharmaceuticals/Contacts	1%	9%	1%	9%	0%	10%
Books	4%	11%	3%	9%	3%	10%
Clothing	3%	6%	6%	9%	4%	9%
Household/Kitchen/Lawn and garden products	3%	3%	2%	4%	3%	6%
Electronic equipment	3%	2%	2%	3%	1%	3%
Toys	2%	2%	1%	2%	3%	2%
Cosmetics/Beauty products/Toiletries	0%	4%	1%	3%	0%	2%
Checkbooks	0%	2%	0%	2%	0%	2%
Food Products	0%	3%	0%	2%	0%	2%
Computer hardware, software, or accessories	1%	1%	1%	1%	1%	2%
Photos/Film	0%	1%	0%	1%	0%	1%
Travel products and information	0%	1%	0%	1%	0%	1%
Other Contents	6%	18%	8%	19%	3%	19%
Total Packages	100%	100%	100%	100%	100%	100%

Source: HDS Diary Sample, FY 2009, 2010, and 2011.
Notes:
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 1.7 billion pieces of CD/DVD rentals sent and received, reported in
First-Class Mail letters in Tables E.1, 1.5, and 1.6

Image of rectangle Appendix B: Methodology

Study Design and Methodology

The U.S. Postal Service Household Diary Study (HDS), conducted by NuStats on behalf of the Volume and Revenue Forecasting division of the Postal Service’s Finance Department, is a continuously fielded study that measures household mail volumes, mail usage, 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, to improve data accuracy through efficient data checking and household 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 individual 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 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, which 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 30 largest metropolitan areas in the United States, as defined by population, according to 100 percent counts of the Census 2010.

· 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 2010 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	2,005	1,320
Quarter 2	1,300	1,999	1,281
Quarter 3	1,300	2,038	1,308
Quarter 4	1,300	1,979	1,291
Total	5,200	8,021	5,200

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 2011 household interview consisted of 8,021 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 130 data items and took an average of 25 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, Internet, and other electronic communication.

· 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.

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

· Periodicals. A summary of magazine and newspaper volumes 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 2011 study (defined as the proportion of respondents who completed the diary portion relative to all recruited respondents) was 64.8 percent. This represents a decrease of 2.4 percent from 2010. 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 the beginning of an assigned diary week, NuStats made reminder calls to households to confirm receipt of the diary package and to answer any questions. If the diary package was not received by this time, NuStats re-confirmed the address, assigned a new diary week, and re-sent the diary package.

The diary package contains 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 are color-coded by mail classification (First-Class Mail received, First-Class Mail sent, Standard, 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 the mail piece.

· 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 used a three-stage editing process to check the accuracy of the diary information recorded by each household. First, returned diary packages were culled for those that represented a reasonable attempt to complete the diary. Second, the diary information recorded for each day were checked to ensure sufficient and logical answers, as well as to verify recorded information against the mail markings returned in the package. The diaries were then scanned using Optical Character Recognition (OCR) software. In stage three, a verifier re-checked the diary information recorded in the OCR software for each day. This second edit functions as a quality control check to ensure data accuracy.

During the editing process, a small number of correction callbacks were made to households to clarify information or to fill-in missing information. Overall, about three percent of returned diaries did not pass the edit checking process.

Of the 8,021 households recruited to receive a diary package, 5,200 actually returned acceptable completed diaries (defined as containing data suitable for analysis) to NuStats, for a completion rate of 64.8 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) through optical scanning technology. The diary data, once scanned using Teleform software, was captured in a database management file.

After completion of data collection, editing and entry tasks, the survey data were contained in 9 data files. One data file contained the Household Interview data. The Mail Diary data were in 8 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 were 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. 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 or not they were legitimate.

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 have reported paying bills online only if he/she also reported 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 2011

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	146	233	379	3.3%	7.8%
$10,000 - $14,999	183	187	370	4.1%	5.9%
$15,000 - $19,999	189	150	339	4.2%	6.1%
$20,000 - $24,999	280	157	437	6.2%	5.8%
$25,000 - $34,999	388	218	606	8.7%	10.9%
$35,000 - $49,999	543	277	820	12.1%	13.9%
$50,000 - $64,999	617	282	899	13.8%	11.5%
$65,000 - $79,999	579	233	812	12.9%	8.8%
$80,000 - $99,999	543	221	764	12.1%	8.8%
$100,000 or more	1,014	420	1,434	22.6%	20.4%
Don't Know	135	135	270	N/A	N/A
Refused	583	308	891	N/A	N/A
Total	5,200	2,821	8,021	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 U.S. Census Bureau, Current Population Survey Annual Demographic File (March 2011).

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	1,262	817	2,079	24.3%	27.6%
Two	2,215	1,020	3,235	42.6%	33.5%
Three	788	402	1,190	15.2%	15.6%
Four	587	327	914	11.3%	13.4%
Five or More	348	255	603	6.7%	9.9%
Total	5,200	2,821	8,021	100.0%	100.0%

Notes:
Sample Percent based only on retrieved households.
Population percent based on U.S. Census Bureau, Current Population Survey Annual Demographic File (March 2011).

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	897	552	1,449	17.3%	19.2%
Midwest	1,181	630	1,811	22.7%	23.4%
South	1,858	1,073	2,931	35.7%	36.0%
West	1,264	566	1,830	24.3%	21.3%
Total	5,200	2,821	8,021	100.0%	100.0%

Notes:
Sample Percent based only on retrieved households.
Population percent based on U.S. Census Bureau, Census 2010, 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	2,597	1,416	4,013	49.9%	48.7%
Other Metro Areas	1,572	829	2,401	30.2%	29.9%
Non-Metropolitan Areas	1,031	576	1,607	19.8%	21.4%
Total	5,200	2,821	8,021	100.0%	100.0%

Notes:
Sample Percent based only on retrieved households.
Population percent based on U.S. Census Bureau, Census 2010; 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	68	67	135	1.3%	5.1%
25 - 44	1,049	667	1,716	20.4%	34.8%
45 - 64	2,296	1,135	3,431	44.6%	38.6%
65+	1,737	921	2,658	33.7%	21.5%
Refused	50	31	81	N/A	N/A
Total	5,200	2,821	8,021	100.0%	100.0%

Notes:
Sample Percent based only on retrieved households that provided a valid response.
Population percent based on U.S. Census Bureau, Current Population Survey Annual Demographic File (March 2011).

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	56	82	138	1.1%	4.4%
Some high school	133	171	304	2.6%	7.7%
High school graduate	1,127	844	1,971	21.8%	29.6%
Some college	954	533	1,487	18.5%	18.6%
Technical school graduate	257	167	424	5.0%	4.4%
College graduate	1,541	625	2,166	29.8%	24.5%
Postgraduate work	1,097	377	1,474	21.2%	10.7%
Refused	35	22	57	N/A	N/A
Total	5,200	2,821	8,021	100.0%	100.0%

Data Weighting and Expansion

This section explains the methodology used for creating sampling and expansion weights for the FY 2011 Household Diary Study.

The FY 2011 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 2011 Recruitment Data

Sampling weights were produced separately for the households that participated in the recruitment phase of the FY 2011 HDS, and those that completed and returned a diary. There were two main weighting variables: Geography and Education. FY 2011 recruitment geographic weights were derived from sample households’ strata and region:

Strata: As mentioned previously, there are three 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 2011 recruitment data for strata:

Table B.8:
HDS 2011 Recruitment Data: Urban/Rural Location

Urban/ Rural Location	Household	Percent	Cumulative Percent
30 Largest Metro Areas	4,013	49.9%	49.9%
Other Metro Areas	2,401	30.2%	80.1%
Non-Metro Counties	1,607	19.8%	100.0%
Total	8,021	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 2011 Recruitment Data: Geographic Region

Geographic Region	Households	Percent	Cumulative Percent
Northeast	1,449	17.3%	17.3%
Midwest	1,811	22.7%	40.0%
South	2,931	35.7%	75.7%
West	1,830	24.3%	100.0%
Total	8,021	100.0%

Strata/Regions: Table B.10 indicates the distribution of households from the FY 2011 recruitment sample within strata and regions.

Population parameters for the intersection of the three strata and four regions were based on 2010 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	1,036	257	156	1,449
Midwest	960	438	413	1,811
South	876	1,292	763	2,931
West	1,141	414	275	1,830
Total	4,013	2,401	1,607	8,021

Table B.11:
HDS 2011 Recruitment Data: Construction of Geographic Weight

Stratum	Geographic Region	Households *(Population)*	Percent	Households *(Sample)*	Percent	Weight
30 Largest Metro Areas	Northeast	8,679,534	7.96%	1,036	12.9%	.62
	Midwest	11,759,871	10.79%	960	12.0%	.90
	South	16,492,511	15.13%	876	10.9%	1.39
	West	13,800,893	12.66%	1,141	14.2%	.89
Other Metro Areas	Northeast	7,316,645	6.71%	257	3.2%	2.10
	Midwest	9,982,770	9.16%	438	5.5%	1.68
	South	19,849,344	18.21%	1,292	16.1%	1.13
	West	9,074,069	8.33%	414	5.2%	1.61
Non-Metro Areas	Northeast	1,485,685	1.36%	156	1.9%	.70
	Midwest	3,551,875	3.26%	413	5.1%	.63
	South	5,200,840	4.77%	763	9.5%	.50
	West	1,796,099	1.65%	275	3.4%	.48
Totals		108,990,136	100.0%	8,021	100.0%	1.00

Source: Household Population Estimates based on U.S. Census Bureau, 2010 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 or 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 2011. For cases in which 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 57 such cases in 2011; 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 2011 Recruitment Data: Construction of Educational Attainment Weight

Educational Attainment	Households *(Population)*	Percent	Households *(Sample)*	Percent	Weight
8^th Grade or Less	5,248,559	4.4%	138	1.7%	2.57
Some high school	9,146,246	7.7%	305	3.8%	2.03
High school graduate	35,116,160	29.6%	1,979	24.7%	1.20
Some college	22,131,142	18.6%	1,506	18.8%	0.99
Technical school graduate	5,196,947	4.4%	448	5.6%	0.78
College graduate	29,126,828	24.5%	2,171	27.1%	0.91
Postgraduate work	12,716,382	10.7%	1,474	18.4%	0.58
Totals	118,682,265	100.0%	8021	100.0%	1.00

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

Weighting Procedures, FY 2011 Diary Data

As mentioned above, 8,021 households participated in the recruitment phase of the FY 2011 HDS, and 5,200 households completed usable diaries. Balancing weights for the FY 2011 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.

Expansion Factor

118,682,265 / 5,200 = 22,823.5

Component Weight:

,

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

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 118.68 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.

Adjustment Factors

In order to account for variations in the reporting of household mail volumes, three types of adjustment factors were used:

1) Destination adjustment factors;

2) Household-to-Household adjustment factors; and

3) Household-to-Non-household adjustment factors.

Destination adjustment factors were based on an average of historical ratios of volumes derived from FY 2011 HDS sample data and mailing volumes reported in the Postal Service’s RPW report. These destination adjustment factors were applied to First-Class Mail, Standard and Nonprofit Mail, Package and Shipping Services, and Periodicals.

Household-to-household adjustment factors were applied based on the logic that mail originating and destinating in households form a “closed loop.” In other words, mail sent by households to households should equal mail received by households from households. (This situation does not necessarily exist within the confines of a finite sample since households may receive mail from households outside the sampling frame.) Therefore, household mail sent is adjusted to equal household mail received. This factor (1.14) was applied to personal First-Class Mail.

Household-to-non-household adjustment factors were applied to account for under-reporting of mail sent by households to non-households. The use of this adjustment factor is based on a comparison between the reported bills paid by households from the recruitment phase of the survey and amounts derived from actual diary data. This factor (1.19) was applied to business First-Class Mail sent by households to non-households.

The following table indicates adjustment factors applied by postal classification.

Table B.13:
HDS 2011 Adjustment Factors Utilized by Postal Classification

Postal Classification	Destination Adjustment Factor	Household-to-Household	Household-to-Non-household
First-Class	0.95	1.14	1.19
Standard Regular	0.89	N/A	N/A
Standard Nonprofit	0.89	N/A	N/A
Package & Shipping Services	0.86	N/A	N/A
Expedited	0.89	N/A	N/A
Periodicals	0.86	N/A	N/A

[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.