Cambridge Econometrics is a leading independent consultancy specialising in applied economic modelling and data analysis techniques. We aim to provide rigorous, accessible and relevant independent economic analysis to support strategic planners and policy-makers in business and government, doing work that we are interested in and can be proud of (see more on our origins and ethos).
Our work covers a number of thematic areas of interest, encompassing the UK, Europe and global areas in our analysis. We also produce economic forecasts at macro, sectoral and regional levels, with a portfolio covering the UK and Europe, delivered through our client-access Knowledge Base.
This page shows a selection of some of our recent work. You can access the full range through the site menus. You can also follow us on LinkedIn.
Including Road Transport in the EU Emissions Trading System
Cambridge Econometrics was commissioned by the European Climate Foundation to model the effects of including road transport in the EU Emissions Trading System (ETS). The E3ME model was used to assess (1) the effect on CO2 emissions if road transport was included in the EU ETS under current EU ETS price projections; (2) the carbon price required to achieve the same level of emissions reduction as that which could be achieved by anticipated vehicle efficiency standards (of 60gCO2/km for new passenger cars by 2030). The analysis shows that under current ETS price projections, inclusion of road transport in the EU ETS would reduce emissions in the road transport sector by just 3% by 2030. In order to achieve the same level of emissions abatement in road transport as that which could be achieved by vehicle efficiency standards, a carbon price averaging €217 over the period 2020-2030 would be required. The report is available here.
For more information contact Sophie Billington.
Environmental taxes and human capital
The concept of Environmental Tax Reform has been around for a long time now but economists continue to debate how best to use the potential revenues from environmental taxation. Cambridge Econometrics recently presented modelling results based on a new suggestion, to use the proceeds to invest in human capital. The idea is attractive to policy makers both in developed and developing countries, as it could equip workers to deal with the structural changes required to follow a path of green growth.
Our approach draws on detailed labour market analysis. It is still early-stage research but the initial results are positive, as summarised here. For more information contact Hector Pollitt.
The Economic Impact of Modern Retail on Choice and Innovation in the EU Food Sector
Cambridge Econometrics, in a team led by EY France and also including Arcadia, has completed a major analysis of the impact of modern developments in retailing on the choice and innovation in products offered to EU consumers. Carried out for DG Competition, the project was based on some 11 million records of bar-code data for products grouped into 23 product categories for 343 shops in 9 EU countries over the period 2004-12. A number of metrics were constructed to measure different aspects of the choice made available to consumers and different kinds of innovation in products.
CE's role was to carry out econometric analysis to distinguish the role played by different potential drivers of choice and innovation, including the characteristics of the shops, the extent of competition among retailers both nationally and in the catchment area of each shop, the extent of competition among suppliers nationally in each product category, the importance of private labels in each product category nationally and in the assortment offered by each shop, as well as a range of socio-demographic and economic environment drivers.
The report was launched in Brussels at a conference addressed by the Director-General, Alexander Italianer.
Fuelling Europe's Future
Cambridge Econometrics, in collaboration with Ricardo-AEA, Element Energy and a number of independent experts, has undertaken a research project to assess the economic impact of decarbonising cars and vans. The project was commissioned by the European Climate Foundation and was informed by a core working group of experts in the motor vehicles industry as well as other interested stakeholders. The report "Fuelling Europe's Future" considers the economic impact of a series of forward looking scenarios that encompass alternative visions of Europe's future vehicle fleet.
The report won the prize for ‘Low Carbon Report of the Year’ at the Low CVP award ceremony on 10th September. The judges commented that “Cambridge Econometrics prepared a very thorough, authoritative, high quality report; very good macroeconomic analysis which gave a holistic overview.” More information about Low CVP and the award ceremony is available on their website: www.lowcvp.org.uk
The report is available here
The Economics of Climate Change Policy in the UK
Cambridge Econometrics was commissioned by WWF-UK to assess the impacts of climate change mitigation measures on UK households, businesses and the macro-economy. MDM-E3, CE’s econometric model of the UK economy, energy system and environment, was used to model the impacts of taking measures to reduce greenhouse gas emissions in the power sector, buildings, transport, industry and agriculture. The analysis shows that investing in energy efficiency measures and low-carbon technologies in order to meet the fourth carbon budget will lead to the creation of 190,000 jobs and a small increase in GDP (1.1%), relative to a scenario in which no further action is taken to decarbonise the UK economy. The report was launched at an event in the Houses of Parliament with a response by Ed Davey, Secretary of State for Energy and Climate Change.
For more information contact Sophie Billington.
The report is available here.
Adult Further Education learners: Matched Data Earnings Analysis
The Department for Business, Innovation and Skills (BIS) has recently published the results of a study carried out by Cambridge Econometrics and the Warwick Institute for Employment Research, which reviewed the potential use for various purposes of a measure of earnings in a new ‘matched’ dataset developed by BIS.
The study team analysed the dataset and recommended methods for overcoming certain limitations of the data (eg it does not explicitly distinguish part-time and full-time employment) and to take account of other observable factors that impact upon a person’s employment and earnings outcomes, in order to be able to present earnings measures for different uses (eg informing choice, assessment/discussion of institutional performance, indicate the value of qualifications). For more information contact Mike May-Gillings.
GDP growth will slow down in 2015 following strong growth in 2014
- Strong growth in household expenditure and investment is expected to taper off in 2015.
- Growth is likely to remain robust in the short-to-medium term for Financial & business services, Information & communications and Construction.
- Little rebalancing is forecast in the medium term.
Cambridge Econometrics has released a new version of its UK Industrial forecast, with detailed macroeconomic and industrial forecasts to the year 2025. A full press release can be found here.
For more information about the forecast and subscriptions to the Industrial service please contact James Stevens.
New: E3ME Global Version
Cambridge Econometrics is pleased to announce the new version of the E3ME model. E3ME now has global coverage, while still covering each EU Member State individually. The treatment of international trade has been improved considerably and the new Future Technology Transformations (FTT) power sector model has been incorporated.
For more information see: www.e3me.com or contact Hector Pollitt.
Estimating the returns to investment in education and training
In the current economic climate, there is a greater than ever need to demonstrate the value for money associated with all forms of public investment, including Government support for education and training. There is emphasis on ensuring that estimates of the returns on public investment use the most appropriate methods and adopt rational and reasonable assumptions about the underlying phenomenon and processes driving these returns to different forms of learning. Drawing on their expertise in this field, Cambridge Econometrics and the Warwick Institute for Employment Research have carried out a systematic and focused review of literature and evidence relevant to particular methodological issues in estimating the returns to Higher Education (HE), Further Education (FE) and Skills interventions. The review, commissioned by Department for Business, Innovation and Skills, recommends the most appropriate ways of addressing each of the key issues in future analysis of the economic value added of these different forms of learning. The review is published in BIS’ Research Paper Number 166.
For more information contact Rachel Beaven.
The macroeconomic impact of wind energy in Ireland
Cambridge Econometrics and Pӧyry Management Consulting, have recently undertaken analysis to assess the macroeconomic implications of an increase in wind energy capacity in Ireland. CE’s role in the project was to assess the impact on the Irish economy as a result of a change in the level of investment, a change in electricity prices and a change in imports/exports of electricity, brought about by an increase in wind generation in Ireland. The analysis was carried out using the E3ME model and found that investment in wind energy could have a small positive benefit for the Irish economy.
The report is available here.
Working Futures 2012-2022
The UK Commission for Employment and Skills has recently published the results of Working Futures 2012-22, the fifth edition of a major study carried out by Cambridge Econometrics and the Warwick Institute for Employment Research. Working Futures provides comprehensive employment projections for the UK, it's nations and regions, and, for the first time, for Local Enterprise Partnership areas in England, Economic Areas in Wales, Regional Skills Assessment areas in Scotland and Workforce Development Forum areas in Northern Ireland. The study meets a need within government, its partners and stakeholders, and among employers and individuals in the labour market, for information on current and future labour market trends to inform decision-making.
For more information contact Mike May-Gillings.
Green jobs and green skills
CE contributed to the new OECD publication on green jobs and skills. By combining quantitative and qualitative analysis, our chapter on the interaction between environmental and labour market policy discusses the possible employment benefits of reducing greenhouse gas emissions in Europe. It also suggests how some of the more negative impacts may be offset through policy intervention. The full publication is available here.
Regional Bio-economy project website launch
A major FP7 project with which Cambridge Econometrics is closely involved (BERST) has recently launched it's own website, from which interested parties can gain information about the research. The purpose of the project, which was launched in December 2013, is to undertake an assessment of the bioeconomy potential and strategies of a range of different regions in Europe, and in doing so gain understanding of the possibilities and challenges related to the enhancement of regional bio-based economies. The outcome of the project will be a toolkit and an operating bio-regional network which should ultimately be taken over by the EU Bioeconomy Observatory.
Please contact Ben Gardiner and Jon Stenning for more information.