Edinburgh Napier University

  This paper examines ferry fares and quality of service to a remote island region and analyses
how this affects the economy of the islands. Taking the Western Isles in Scotland as a case
study, the paper identifies the links between fares, service, and economic development and
attempts to quantify this impact. A new methodology is developed to estimate the impact of
service frequency.
Our findings show that a reduction in ferry fares and, in particular in increase in service
frequency, will have substantial income and employment benefits to the local economy,
running into millions of pounds annually. It is also revealed that there is potential to increase
the quality of service to the Isles, and reduce fares in some cases, with no increase in public
subsidy towards operating costs. This is achieved by taking a more radical perspective to the
routes and services operated, and by more closely matching service provision to the demands
of communities within the islands.