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Validity Tests of Benefit Transfer – Are We Performing the Wrong Tests?

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  • Dadi Kristofersson
  • Ståle Navrud

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Abstract

The validity of environmental benefit transfer has been tested on numerous occasions assuming classical null hypothesis of equality. We argue against this assumption on the basis of theory, which clearly indicates that environmental benefits should be assumed to vary from context to context. We suggest the use of equivalence testing as a more appropriate and a clear compliment to the shortcomings of classical tests. Equivalence tests test the null hypothesis of difference between the original and transferred value estimates. Equivalence tests also combine the concepts of statistical significance and policy significance into one test, by defining an acceptable transfer error prior to the validity test. The results of a published study on validity of benefit transfer are reversed when subjected to an equivalence test. Copyright Springer 2005

Suggested Citation

  • 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.
  • Handle: RePEc:kap:enreec:v:30:y:2005:i:3:p:279-286
    DOI: 10.1007/s10640-004-2303-8
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    Citations

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    Cited by:

    1. Rosenberger, Randall S. & Stanley, Tom D., 2006. "Measurement, generalization, and publication: Sources of error in benefit transfers and their management," Ecological Economics, Elsevier, vol. 60(2), pages 372-378, December.
    2. Baskaran, Ramesh & Cullen, Ross & Colombo, Sergio, 2010. "Testing different types of benefit transfer in valuation of ecosystem services: New Zealand winegrowing case studies," Ecological Economics, Elsevier, vol. 69(5), pages 1010-1022, March.
    3. Lindhjem, Henrik & Navrud, Ståle, 2008. "How reliable are meta-analyses for international benefit transfers?," Ecological Economics, Elsevier, vol. 66(2-3), pages 425-435, June.
    4. Genty, Aurélien, 2005. "Du concept à la fiabilité de la méthode du transfert en économie de l’environnement : un état de l’art," Cahiers d'Economie et de Sociologie Rurales (CESR), INRA (French National Institute for Agricultural Research), vol. 77.
    5. Lindhjem, Henrik & Navrud, Ståle, 2008. "Internet CV surveys – a cheap, fast way to get large samples of biased values?," MPRA Paper 11471, University Library of Munich, Germany.
    6. 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.
    7. Baskaran, Ramesh & Cullen, Ross & Colombo, Sergio, 2010. "Economic Valuation of Ecosystem Services in New Zealand Winegrowing Regions: Testing for Benefit Transfer," Review of Applied Economics, Review of Applied Economics, vol. 6(1-2).
    8. Kerr, Geoffrey N. & Latham, N., 2011. "The Value of Recreational Inshore Marine Fishing," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115408, New Zealand Agricultural and Resource Economics Society.
    9. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    10. Marianne Zandersen & Mette Termansen & Frank S. Jensen, 2005. "Valuing New Forest Sites over Time: the Case of Afforestation and Recreation in Denmark," Working Papers FNU-80, Research unit Sustainability and Global Change, Hamburg University, revised Aug 2005.
    11. 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.
    12. Matthews, D.I. & Hutchinson, W.G. & Scarpa, R., 2009. "Testing the stability of the benefit transfer function for discrete choice contingent valuation data," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 131-146, January.
    13. Roy Brouwer, 2009. "Multi-Attribute Choice Modeling of Australia’s Rivers and Wetlands: A Meta-Analysis of Ten Years of Research," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-05, CSIRO Sustainable Ecosystems.
    14. Mikołaj Czajkowski & Wiktor Budziński, 2017. "Simulation error in maximum likelihood estimation of discrete choice models," Working Papers 2017-18, Faculty of Economic Sciences, University of Warsaw.
    15. Wilson, Matthew A. & Hoehn, John P., 2006. "Valuing environmental goods and services using benefit transfer: The state-of-the art and science," Ecological Economics, Elsevier, vol. 60(2), pages 335-342, December.
    16. Czajkowski, Mikolaj & Scasný, Milan, 2010. "Study on benefit transfer in an international setting. How to improve welfare estimates in the case of the countries' income heterogeneity?," Ecological Economics, Elsevier, vol. 69(12), pages 2409-2416, October.
    17. Leon-Gonzalez, Roberto & Scarpa, Riccardo, 2008. "Improving multi-site benefit functions via Bayesian model averaging: A new approach to benefit transfer," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 50-68, July.
    18. Luke Brander & Andrea Ghermandi & Onno Kuik & Anil Markandya & Paulo A.L.D. Nunes & Marije Schaafsma & Alfred Wagtendonk, 2010. "Scaling up Ecosystem Services Values: Methodology, Applicability and a Case Study," Working Papers 2010.41, Fondazione Eni Enrico Mattei.
    19. Gebeyehu Fetene & Søren Olsen & Ole Bonnichsen, 2014. "Disentangling the Pure Time Effect From Site and Preference Heterogeneity Effects in Benefit Transfer: An Empirical Investigation of Transferability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 583-611, December.
    20. Brouwer, Roy & van Beukering, Pieter & Sultanian, Elena, 2008. "The impact of the bird flu on public willingness to pay for the protection of migratory birds," Ecological Economics, Elsevier, vol. 64(3), pages 575-585, January.
    21. Lindhjem, Henrik & Navrud, Ståle, 2010. "Can cheap panel-based internet surveys substitute costly in-person interviews in CV surveys?," MPRA Paper 24069, University Library of Munich, Germany.
    22. Aurélien Genty, 2005. "Du concept à la fiabilité de la méthode du transfert en économie de l’environnement : un état de l’art," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 77, pages 5-34.
    23. 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.
    24. Tzipi Eshet & Mira Baron & Mordechai Shechter, 2007. "Exploring Benefit Transfer: Disamenities of Waste Transfer Stations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(3), pages 521-547, July.
    25. Aurélien Genty, 2005. "Du concept à la fiabilité de la méthode du transfert en économie de l’environnement : un état de l’art," Post-Print hal-01201112, HAL.

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