Welfare effects of low water levels on the river Rhine through the Inland Waterway Transport Sector

The authors derive the annual welfare effects of low water levels on the river Rhine employing detailed trip data reported by bargemen between January 2003 and July 2005. They find a considerable effect of water levels on freight price per ton and load factor, but the effect on the price per trip is close to zero. Using water level information over a period of almost 20 years, the average annual welfare loss due to low water levels is estimated to be about C28 £28 million. In years with extremely low water levels, such as in 2003, the loss amounts to about £91 million, about 13 per cent of the market turnover in the part of the Rhine market considered.