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Socioeconomic adjustments and choice experiment benefit function transfer: Evaluating the common wisdom

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  • Johnston, Robert J.
  • Duke, Joshua M.

Abstract

It is often argued that attribute adjustments made possible within choice experiments have the potential to improve benefit transfer accuracy. These transfers, however, often omit socioeconomic adjustments; this reflects a limited presence of socioeconomic covariates in broader choice experiments. The lack of correspondence between common guidance that socioeconomic adjustments should be applied and simultaneous arguments for the advantages of choice experiment transfers leads to ambiguity for transfer practice. This paper contrasts the change in transfer performance resulting from an ability to adjust for policy attributes with that resulting from an ability to adjust for socioeconomic attributes. Results are illustrated for the case of agricultural land preservation. The goal is to provide evidence regarding the tradeoff faced by practitioners who seek to use choice experiments for benefit transfer but lack the ability to adjust for socioeconomic attributes.

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  • Johnston, Robert J. & Duke, Joshua M., 2010. "Socioeconomic adjustments and choice experiment benefit function transfer: Evaluating the common wisdom," Resource and Energy Economics, Elsevier, vol. 32(3), pages 421-438, August.
    • Handle: RePEc:eee:resene:v:32:y:2010:i:3:p:421-438
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    1. Randall S. Rosenberger & Robert J. Johnston, 2009. "Selection Effects in Meta-Analysis and Benefit Transfer: Avoiding Unintended Consequences," Land Economics, University of Wisconsin Press, vol. 85(3), pages 410-428.
    2. Yong Jiang & Stephen Swallow & Michael Mcgonagle, 2005. "Context-Sensitive Benefit Transfer Using Stated Choice Models: Specification and Convergent Validity for Policy Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(4), pages 477-499, August.
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    7. Robert J. Johnston & Joshua M. Duke, 2007. "Willingness to Pay for Agricultural Land Preservation and Policy Process Attributes: Does the Method Matter?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1098-1115.
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    11. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    12. Robert Johnston & Joshua Duke, 2008. "Benefit Transfer Equivalence Tests with Non-normal Distributions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(1), pages 1-23, September.
    13. Sergio Colombo & Javier Calatrava-Requena & Nick Hanley, 2007. "Testing Choice Experiment for Benefit Transfer with Preference Heterogeneity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 135-151.
    14. Sergio Colombo & Nick Hanley, 2008. "How Can We Reduce the Errors from Benefits Transfer? An Investigation Using the Choice Experiment Method," Land Economics, University of Wisconsin Press, vol. 84(1), pages 128-147.
    15. Robert Johnston, 2007. "Choice experiments, site similarity and benefits transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(3), pages 331-351, November.
    16. Mark Morrison & Jeff Bennett, 2004. "Valuing New South Wales rivers for use in benefit transfer," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(4), pages 591-611, December.
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    20. Johnston, Robert J. & Swallow, Stephen K. & Bauer, Dana Marie & Anderson, Christopher M., 2003. "Preferences for Residential Development Attributes and Support for the Policy Process: Implications for Management and Conservation of Rural Landscapes," Agricultural and Resource Economics Review, Cambridge University Press, vol. 32(1), pages 65-82, April.
    21. V. Kerry Smith & George Van Houtven & Subhrendu K. Pattanayak, 2002. "Benefit Transfer via Preference Calibration: "Prudential Algebra" for Policy," Land Economics, University of Wisconsin Press, vol. 78(1), pages 132-152.
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    24. Barton, David N., 2002. "The transferability of benefit transfer: contingent valuation of water quality improvements in Costa Rica," Ecological Economics, Elsevier, vol. 42(1-2), pages 147-164, August.
    25. Robert J. Johnston & Joshua M. Duke, 2009. "Willingness to Pay for Land Preservation across States and Jurisdictional Scale: Implications for Benefit Transfer," Land Economics, University of Wisconsin Press, vol. 85(2), pages 217-237.
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    Cited by:

    1. Duke, Joshua M. & Dundas, Steven J. & Johnston, Robert J. & Messer, Kent D., 2014. "Prioritizing payment for environmental services: Using nonmarket benefits and costs for optimal selection," Ecological Economics, Elsevier, vol. 105(C), pages 319-329.
    2. Dennis Guignet & Matthew T. Heberling & Michael Papenfus & Olivia Griot, 2022. "Property Values, Water Quality, and Benefit Transfer: A Nationwide Meta-analysis," Land Economics, University of Wisconsin Press, vol. 98(2), pages 191-218.
    3. Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2018. "Improving Water Quality in an Iconic Estuary: An Internal Meta-analysis of Property Value Impacts Around the Chesapeake Bay," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 265-292, February.
    4. Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2015. "Explaining Variation in the Value of Chesapeake Bay Water Quality Using Internal Meta-analysis," NCEE Working Paper Series 201504, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2015.
    5. Robert J. Johnston & Ewa Zawojska, 2020. "Relative Versus Absolute Commodity Measurements in Benefit Transfer: Consequences for Validity and Reliability," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(4), pages 1245-1270, August.
    6. Farolfi, Giulio & Johnston, Robert J., 2022. "Understanding Public Preferences for Shellfish Aquaculture Expansion: The Role of Production Technology and Environmental Impacts," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322131, Agricultural and Applied Economics Association.
    7. Alberini, Anna & Bigano, Andrea & Ščasný, Milan & Zvěřinová, Iva, 2018. "Preferences for Energy Efficiency vs. Renewables: What Is the Willingness to Pay to Reduce CO2 Emissions?," Ecological Economics, Elsevier, vol. 144(C), pages 171-185.
    8. Taro Ohdoko & Satoru Komatsu & Shinji Kaneko, 2013. "Residential preferences for stable electricity supply and a reduction in air pollution risk: a benefit transfer study using choice modeling in China," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(3), pages 309-328, July.
    9. Czajkowski, Mikołaj & Ahtiainen, Heini & Artell, Janne & Meyerhoff, Jürgen, 2017. "Choosing a Functional Form for an International Benefit Transfer: Evidence from a Nine-country Valuation Experiment," Ecological Economics, Elsevier, vol. 134(C), pages 104-113.
    10. Matthew Burlingame & Dennis Guignet & Matthew Heberling & Michael Papenfus, 2023. "Using Benefit Transfer to Estimate Housing Value Increases from Improved Water Clarity," Working Papers 23-07, Department of Economics, Appalachian State University.
    11. Robert J. Johnston & Kevin J. Boyle & Maria L. Loureiro & Ståle Navrud & John Rolfe, 2021. "Guidance to Enhance the Validity and Credibility of Environmental Benefit Transfers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(3), pages 575-624, July.
    12. Artell, Janne & Ahtiainen, Heini & Pouta, Eija, 2019. "Distance decay and regional statistics in international benefit transfer," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    13. Schaafsma, Marije & Brouwer, Roy & Liekens, Inge & De Nocker, Leo, 2014. "Temporal stability of preferences and willingness to pay for natural areas in choice experiments: A test–retest," Resource and Energy Economics, Elsevier, vol. 38(C), pages 243-260.
    14. Robert J. Johnston & Ewa Zawojska, 2018. "Benefit Transfer and Commodity Measurement Scales: Consequences for Validity and Reliability," Working Papers 2018-26, Faculty of Economic Sciences, University of Warsaw.
    15. Klaus Glenk & Julia Martin-Ortega & Manuel Pulido-Velazquez & Jacqueline Potts, 2015. "Inferring Attribute Non-attendance from Discrete Choice Experiments: Implications for Benefit Transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(4), pages 497-520, April.

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