Edited by Raymond J.G.M. Florax, Peter Nijkamp and Kenneth G. Willis
Chapter 8: Benefit function transfer versus meta-analysis as policy-making tools: a comparison
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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