Exploring Benefit Transfer: Disamenities of Waste Transfer Stations

The benefit transfer method was developed as an alternative way to value externalities using values from studies of similar circumstances, carried out at similar sites somewhere else, given the challenges and high costs inherent in assessing the actual cost. Specifically, in order to test the performance of the benefit transfer method, employing hedonic price models, this study focused on estimates of disamenities associated with waste transfer stations at four different cities in Israel. The sites were intentionally selected to represent a variety of circumstances. We transferred the estimated benefit function from a “study site” to a “policy site”. The goodness of fit was examined by comparing the calculated value, with actual data from the policy site. To test the sensitivity of the benefit transfer function to socioeconomic and housing characteristics, it was repeatedly applied to different sets of observations. The findings suggest that a relatively large number of alternative benefit functions are transferable. Statistical inequality outcome regarding the degree of similarity between samples does not unequivocally rule out the appropriateness of transferring environmental values across studies. Transfer errors varied between −21% and +29%, and the absolute average error for all transfers was 15.4%. Errors were lower for transfer between relatively similar cities in terms of size and location and between sub-samples that were similar in socioeconomic characteristics and housing type. However, when a site with very dissimilar data was involved, the average absolute error rose to 19%. Copyright Springer Science+Business Media, Inc. 2007