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Calibration of values in benefit transfer to account for variations in geographic scale and scope: Comparing two choice modelling experiments

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  • Rolfe, John
  • Windle, Jill
  • Bennett, Jeff
  • Mazur, Kasia

Abstract

Two choice modelling studies in Australia were designed to test for the effects of variations in geographic scale and scope on WTP values. One case study assessed values for improved natural resource management in a river catchment, and the other assessed values for improved protection of the Great Barrier Reef. The results show that increases in the amount of an amenity offered are valued positively and display diminishing marginal utility. Unit value estimates vary inversely with increases in the geographic scope over which an amenity improvement was offered. In the case studies, marginal values for the same unit of environmental improvement could be several thousand times higher when only very small areas were considered compared to when the whole amenity was framed. These results confirm that calibration factors are needed in benefit transfer applications between different geographic scopes. A close inverse relationship was identified between the ratio of quantities involved and the ratio of the WTP amounts. A log-log form of this relationship is recommended as a simple and efficient way of performing this calibration.

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Bibliographic Info

Paper provided by Australian Agricultural and Resource Economics Society in its series 2013 Conference (57th), February 5-8, 2013, Sydney, Australia with number 152176.

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Date of creation: Feb 2013
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Handle: RePEc:ags:aare13:152176

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Keywords: Demand and Price Analysis; Land Economics/Use; Research Methods/ Statistical Methods;

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References

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  3. John Rolfe & Jill Windle, 2008. "Testing for differences in benefit transfer values between state and regional frameworks," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(2), pages 149-168, 06.
  4. John Rolfe & Jill Windle, 2010. "Testing for geographic scope and scale effects with choice modelling: Application to the Great Barrier Reef," Environmental Economics Research Hub Research Reports 1069, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
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  9. Rolfe, John & Bennett, Jeffrey W. & Louviere, Jordan, 2002. "Stated values and reminders of substitute goods: Testing for framing effects with choice modelling," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(1), March.
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  12. Pate, Jennifer & Loomis, John, 1997. "The effect of distance on willingness to pay values: a case study of wetlands and salmon in California," Ecological Economics, Elsevier, vol. 20(3), pages 199-207, March.
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