Study on benefit transfer in an international setting. How to improve welfare estimates in the case of the countries' income heterogeneity?
AbstractThe paper aims at investigating the validity of benefit transfer in the case of transfers between countries highly heterogeneous in income, and demonstrates relative performance of different benefit transfer methods under these conditions. Lake water quality valuation studies were conducted in two countries in transition -- Poland and the Czech Republic. They reflected two earlier studies carried out in Norway. We examine how income elasticity of WTP varies with the levels of income and find support for applying the income elasticity of 1 to adjust transferred welfare estimates in case of high differences in income between countries. In addition, we show that using site-specific measures of income outperforms transfers based on GPD per capita. The accuracy of benefit transfer is compared using equivalence testing following the TOSC (two one-sided convolutions) test. A new, more informative way of reporting equivalence is proposed, based on computing minimum tolerance level rather than specifying it a priori.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 69 (2010)
Issue (Month): 12 (October)
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Web page: http://www.elsevier.com/locate/ecolecon
Benefit transfer Income heterogeneity Contingent valuation Water quality Equivalence testing TOSC Minimum tolerance level Convolutions Economies in transition;
Other versions of this item:
- Mikołaj Czajkowski & Milan Ščasný, 2008. "Study on Benefit Transfer in an International Setting. How to Improve Welfare Estimates in the Case of the Countries' Income Heterogeneity?," Working Papers 2008-09, Faculty of Economic Sciences, University of Warsaw.
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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