Market Impacts of Changing Registration Fees

12th October 2018

The Environment Agency (EA) is the second largest navigation authority in the UK and is responsible for managing around 1000km of inland waterways. They wanted to understand what impact changing their boat registration fees would have on the market, and came to us for support.

Our specialists in econometrics explored the relationship between boat registration fees and demand for inland boating, and used econometric analysis to provide estimates of the elasticity of demand (i.e. the change in demand according to price) with respect to registration fees.

We utilised a fixed effects panel data econometric approach for estimating the short- and long-run price elasticity of demand, using the data on the number of registrations, size of craft, location, as well as relevant micro and macroeconomic indicators.

The EA used our research to understand what the likely impacts would be if they changed the registration fee on the number of boat registrations.

Our lead consultant Tanzir Chowdhury said:

“Our modelling provided the EA with a clear indication of the likely impact associated with changing the registration fee. This served as an excellent example of our ability to develop a bespoke econometric modelling solution for our clients who want to understand how changes they’re considering are likely to impact markets before they commit to actually making those changes”.

Julian Kennard, National Senior Adviser at the Environment Agency said:

“Eunomia’s work was crucial to our understanding the likely real-world impact of a range of potential charging scenarios on the 29,000 boats using our waterways, the income from which is essential to maintain them in safe condition for everyone to enjoy”.