Edited by Raymond J.G.M. Florax, Peter Nijkamp and Kenneth G. Willis
Chapter 7: Benefit transfer: testing for accuracy and reliability
7. Beneﬁt transfer: testing for accuracy and reliability Olvar Bergland, Kristin Magnussen, Ståle Navrud* 1 INTRODUCTION Valuing environmental impacts of a project, policy initiative or regulation using the contingent valuation method or other non-market valuation techniques takes time and can be very costly. As an alternative to conducting new and project speciﬁc valuation studies, already estimated values could be used as approximations. Such an approach has been termed ‘beneﬁt transfer’ because the estimates of economic beneﬁts are ‘transferred’ from a site where a study has already been done to the site of policy interest (Desvousges et al., 1992). The site of the previous research is called the ‘study site’, and the site where the new beneﬁt estimate is needed is termed the ‘policy site’. Such transfer is a ‘less than ideal’ beneﬁt estimation method, but so are most valuation eﬀorts in the sense that better estimates could often be obtained if more time and money were available. Analysts must constantly judge how to provide sound policy advice in a timely manner, subject to the resource constraints they face. Also beneﬁt transfer methods may be particularly useful in policy contexts where rough economic value estimates may be suﬃcient to make a judgment regarding the advisability of a policy or project. Authorities in many countries frequently use beneﬁt transfer in some form, but little has been done to test the appropriateness of such procedures. There is a need for more knowledge...
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