Table of Contents

Comparative Environmental Economic Assessment

Comparative Environmental Economic Assessment

Edited by Raymond J.G.M. Florax, Peter Nijkamp and Kenneth G. Willis

Over the last decade, economists have increasingly recognized the role of meta-analysis and value transfer in synthesizing knowledge and efficiently exploiting the existing pool of knowledge. Comparative Environmental Economic Assessment explores the potential significance of using these techniques, particularly in environmental economics. Both meta-analysis and value transfer constitute major research tools which efficiently use knowledge previously acquired from other studies. The book focuses on the potential role and usefulness of these tools in environmental economic research, and goes on to address their validity, relevance and applicability

Chapter 8: Benefit function transfer versus meta-analysis as policy-making tools: a comparison

Stefanie Engel

Subjects: economics and finance, environmental economics, environment, environmental economics

Extract

8. Benefit function transfer versus meta-analysis as policy-making tools: a comparison Stefanie Engel* 1 INTRODUCTION Benefit transfer can be defined as ‘the transfer of existing estimates of nonmarket values to a new study which is different from the study for which the values were originally estimated’ (Boyle and Bergstrom, 1992, p.651). The site for which the original estimates were obtained is often referred to as the ‘study site’, while the site under consideration for a new policy is termed the ‘policy site’ (Desvousges et al., 1992). The high cost and lead time required for primary studies frequently cause the expected benefits from such a study (in terms of improved decision making) to be less than the costs. Benefit transfer has evolved as a practical approach to benefit estimation in these cases. The underlying assumption is that an imperfect estimate is better than no estimate, and that we can draw on the existing stock of valuation studies to derive benefit estimates for the policy site. The demand for benefit transfer in the United States and other countries is substantial and is likely to increase over time owing to the following developments (McConnell 1992): 1. US Executive Order 12291 of 1981 which requires that all new major regulations be subject to benefit–cost analysis, combined with time and budget constraints; litigation stemming from natural resources damages in the US Comprehensive Environmental Responses, Compensation and Liability Act (CERCLA), particularly Type A events which...

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