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Lake Water Quality Valuation - Benefit Transfer Approach vs. Empirical Evidence

Author

Listed:
  • Agnieszka Markowska
  • Olimpia Markiewicz
  • Anna Bartczak
  • Milan Scasny
  • Jan Melichar
  • Hana Skopkova

Abstract

The paper reports research in benefit transfer validity between Norway and two New Member States of EU-Poland and the Czech Republic. Based on the original eutrophication contingent valuation study conducted in Norway in 1994, repeated later in Norway (1997) and Germany (2000), two studies were conducted in Poland and the Czech Republic in 2005 in which we ask residents for willingness-to-pay for a hypothetical improvement of water quality in a lake which is strongly euthrophicated and therefore not usable for all recreational activities. The studies were designed in a way that would match the Norwegian original as closely as possible, with regard to site selection, scenario, payment vehicle and even the questionnaire design. The experience gained and the data collected serves to test for possibilities for future BT from Western European countries to new EU Member States as well as between two new member countries. Naive single benefit transfer yields the largest error rates. Transfers adjusted by purchasing power decrease these errors, however, they still remain very large. The error rates are more reduced by transfer benefit function and particularly after adjustments by income elasticities. Following our best transfer, the lowest error remains as high as 30%. Error rates for transferring benefits from Norwegian 1997-study which is just comparable with the Czech and Polish one from even after purchasing power adjustments remain. The paper summarizes the process of collecting data and results, analyzes main differences between the original and two latter studies as well as between the new studies. Finally, value transfer and function transfer are conducted and followed by validity tests.

Suggested Citation

  • Agnieszka Markowska & Olimpia Markiewicz & Anna Bartczak & Milan Scasny & Jan Melichar & Hana Skopkova, 2007. "Lake Water Quality Valuation - Benefit Transfer Approach vs. Empirical Evidence," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 19.
  • Handle: RePEc:eko:ekoeko:19_156
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    File URL: http://ekonomia.wne.uw.edu.pl/ekonomia/getFile/652
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    References listed on IDEAS

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    1. Kirchhoff, Stefanie & Colby, Bonnie G. & LaFrance, Jeffrey T., 1997. "Evaluating the Performance of Benefit Transfer: An Empirical Inquiry," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 75-93, May.
    2. Thilo Muthke & Karin Holm-mueller, 2004. "National and International Benefit Transfer Testing with a Rigorous Test Procedure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 323-336, November.
    3. Richard Ready & Ståle Navrud & Brett Day & Richard Dubourg & Fernando Machado & Susana Mourato & Frank Spanninks & Maria Rodriquez, 2004. "Benefit Transfer in Europe: How Reliable Are Transfers between Countries?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(1), pages 67-82, September.
    4. Dadi Kristofersson & Ståle Navrud, 2005. "Validity Tests of Benefit Transfer – Are We Performing the Wrong Tests?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 279-286, March.
    5. Blundell, Richard & Meghir, Costas, 1987. "Bivariate alternatives to the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 179-200.
    6. Barton, David N. & Mourato, Susana, 2003. "Transferring the benefits of avoided health effects from water pollution between Portugal and Costa Rica," Environment and Development Economics, Cambridge University Press, vol. 8(02), pages 351-371, May.
    7. Lauraine G. Chestnut & Bart D. Ostro & Nuntavarn Vichit-Vadakan, 1997. "Transferability of Air Pollution Control Health Benefits Estimates from the United States to Developing Countries: Evidence from the Bangkok Study," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1630-1635.
    8. Anne Rozan, 2004. "Benefit Transfer: A Comparison of WTP for Air Quality between France and Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 295-306, November.
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