How many for the ferry boat?-Using economics and statistics for forecast demand for a new ferry service

Accurate forecasts of demand for new services are essential for investment appraisal. In some circumstances a model of demand for similar services can be established that can then be used to forecast demand for the new service. This article describes the estimation of two models: firstly of the demand for ferry services to Scottish Islands, and secondly of the likely choice of ferry service where more than one route is available. The two estimated models were then applied to a proposed new service to Jura and Islay and the numbers likely to use such a service forecast. Finally there is a brief discussion of the decision on whether to proceed with the service.