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Study on Benefit Transfer in an International Setting. How to Improve Welfare Estimates in the Case of the Countries' Income Heterogeneity?

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Author Info

  • Mikołaj Czajkowski

    ()
    (Warsaw Ecological Economics Center, Faculty of Economic Sciences, University of Warsaw)

  • Milan Ščasný

    (Environment Center, Charles University Prague)

Abstract

The 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. We examine how income elasticity of WTP varies in line with the levels of income in order to provide scientifically sound elasticity factor for adjusting transferred welfare estimates. In addition, we have noted that using site-specific measures of income substantially outperforms transfers based on GPD per capita. The results provide conclusions for the future benefit transfers between countries differentiated by income. The accuracy of benefit transfer is compared using equivalence testing following the TOSC test; a new, more informative way of reporting equivalence is proposed and developed, based on computing minimum tolerance level rather than specifying it a priori. The empirical studies are one of the first applications of virtually the same study settings and questionnaires in an environmental quality context, what supplements a few previously existing applications in health effects settings. Lake water quality valuation studies were conducted in two countries in transition – Poland and the Czech Republic – that reflected the earlier studies carried out in Norway and Germany. The use of the same questionnaires and scenarios allowed to control for survey artefacts that could possibly bias the willingness to pay. The welfare estimates collected at four different sites provided a wide base for testing the benefit transfer and comparing the performance of methods to improve the transfer accuracy. Finally, the guidelines for future applications have been offered, as particularly valuable for benefit transfers between countries highly heterogeneous in income.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP9.pdf
File Function: First version, 2008
Download Restriction: no

Bibliographic Info

Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2008-09.

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Length: 24 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:war:wpaper:2008-09

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Related research

Keywords: benefit transfer; income heterogeneity; contingent valuation; water quality; equivalence testing; TOSC; convolutions; economies in transition;

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Cited by:
  1. Baulcomb, Corinne & Moran, Dominic, 2011. "Rapid Integrated Assessment of Climate Change-Induced Disease Burdens under Uncertainty," Working Papers 131462, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
  2. Baulcomb, Corinne & Moran, Dominic, 2011. "Rapid Integrated Assessment of Climate Change-Induced Disease Burdens under Uncertainty," Working Papers 131462, Scottish Agricultural College, Land Economy Research Group.
  3. Dritan Osmani, 2013. "Valuing Equally the Environmental Goods in Rich and Poor Countries in a Post-Kyoto World," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 7(2), pages 073-099, July.
  4. Czajkowski, Mikołaj & Bartczak, Anna & Giergiczny, Marek & Navrud, Stale & Żylicz, Tomasz, 2014. "Providing preference-based support for forest ecosystem service management," Forest Policy and Economics, Elsevier, vol. 39(C), pages 1-12.

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