Thames Water commissioned Economic Insight to consider the extent to which population transience (transience) – the propensity of people to migrate – drives water companies’ household (HH) retail costs.
As part of our wider work on the HH retail control, we developed a set of econometric cost models, one of which includes a definition of transience as a statistically significant cost driver. This report tests the robustness of this finding to alternative measures of transience; and examines the performance of these measures within our wider suite of econometric models.
In addition, to demonstrate the implication of omitting a valid driver of efficient costs, we analyse how company allowed costs are impacted by the exclusion / inclusion of transience.
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