This thesis’ objective is to evaluate the recently proposed Shy (2002) approach of estimating consumer switching costs. We apply Shy’s method for estimating switching costs on the Swedish markets for bank deposits and telecommunications. The evaluation has been achieved by comparing estimated results to economic theories, related empirical studies, and our expectations. No strong evidence could be found against the correctness of the calculated switching costs using the Shy approach. It is shown that results obtained by using the Shy approach appeared reasonable in most cases. However it is not found possible to establish whether this is due to the fact that the Shy approach of estimating switching cost is correct or due to contaminated data. Therefore it is not found possible to establish the Shy approach of estimating switching cost as neither incorrect nor correct. Despite these ambiguous results this thesis still contributes to an enhanced knowledge about switching costs and the problems that arouses in the estimation of these costs.