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Threshold Effects in Meta-Analyses With Application to Benefit Transfer for Coral Reef Valuation

Listed author(s):
  • Fitzpatrick, Luke
  • Parmeter, Christopher F.
  • Agar, Juan

Policymakers and advocates often use benefit transfers to estimate the economic value of environmental amenities when primary valuation studies are infeasible. Benefit transfers based on meta-analyses, which synthesize site and methodological characteristics from valuation studies of similar underlying amenities, generally outperform traditional site-to-site transfers. We build on earlier meta-analyses of willingness-to-pay for tropical coral reef recreation by introducing a meta-regression model with threshold effects, with a goal of increasing transfer reliability. We estimate a threshold in coral reef quality and find that increases in live coral cover have a large impact on individuals' WTP for recreation at degraded coral reefs. Relaxing the assumption of users' constant valuation across the distribution of this characteristic improves the performance of coral reef benefit transfers in some instances: tests of convergent validity reveal that including the threshold effect reduces the mean transfer error and the interquartile range of transfer errors in 5 out of 8 tests.

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File URL: http://www.sciencedirect.com/science/article/pii/S092180091630235X
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Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 133 (2017)
Issue (Month): C ()
Pages: 74-85

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Handle: RePEc:eee:ecolec:v:133:y:2017:i:c:p:74-85
DOI: 10.1016/j.ecolecon.2016.11.015
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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  1. George Parsons & Steven Thur, 2008. "Valuing Changes in the Quality of Coral Reef Ecosystems: A Stated Preference Study of SCUBA Diving in the Bonaire National Marine Park," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(4), pages 593-608, August.
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  8. Kaul, Sapna & Boyle, Kevin J. & Kuminoff, Nicolai V. & Parmeter, Christopher F. & Pope, Jaren C., 2013. "What can we learn from benefit transfer errors? Evidence from 20 years of research on convergent validity," Journal of Environmental Economics and Management, Elsevier, vol. 66(1), pages 90-104.
  9. Brander, Luke M. & Van Beukering, Pieter & Cesar, Herman S.J., 2007. "The recreational value of coral reefs: A meta-analysis," Ecological Economics, Elsevier, vol. 63(1), pages 209-218, June.
  10. Robert J. Johnston & Elena Y. Besedin & Richard Iovanna & Christopher J. Miller & Ryan F. Wardwell & Matthew H. Ranson, 2005. "Systematic Variation in Willingness to Pay for Aquatic Resource Improvements and Implications for Benefit Transfer: A Meta-Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2-3), pages 221-248, 06.
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  13. V. Smith & Subhrendu Pattanayak, 2002. "Is Meta-Analysis a Noah's Ark for Non-Market Valuation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 271-296, June.
  14. Kevin J. Boyle & Nicolai V. Kuminoff & Christopher F. Parmeter & Jaren C. Pope, 2009. "Necessary Conditions for Valid Benefit Transfers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1328-1334.
  15. John Braden & Xia Feng & DooHwan Won, 2011. "Waste Sites and Property Values: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 175-201, October.
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  17. Kitipop Phewmau, 2013. "Recreational valuation of the coral diving activities at Similan island national park in Thailand," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(1), pages 79-86, March.
  18. Jon Nelson & Peter Kennedy, 2009. "The Use (and Abuse) of Meta-Analysis in Environmental and Natural Resource Economics: An Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(3), pages 345-377, March.
  19. Kragt, Marit Ellen & Roebeling, Peter C. & Ruijs, Arjan, 2009. "Effects of Great Barrier Reef degradation on recreational reef-trip demand: a contingent behaviour approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), June.
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  21. Moeltner, Klaus & Boyle, Kevin J. & Paterson, Robert W., 2007. "Meta-analysis and benefit transfer for resource valuation-addressing classical challenges with Bayesian modeling," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 250-269, March.
  22. Van Houtven, George & Powers, John & Pattanayak, Subhrendu K., 2007. "Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis?," Resource and Energy Economics, Elsevier, vol. 29(3), pages 206-228, September.
  23. T.D. Stanley & Hristos Doucouliagos & Margaret Giles & Jost H. Heckemeyer & Robert J. Johnston & Patrice Laroche & Jon P. Nelson & Martin Paldam & Jacques Poot & Geoff Pugh & Randall S. Rosenberger & , 2013. "Meta-Analysis Of Economics Research Reporting Guidelines," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 390-394, 04.
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