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How Can We Reduce the Errors from Benefits Transfer? An Investigation Using the Choice Experiment Method

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  • Sergio Colombo
  • Nick Hanley

Abstract

Policymakers are increasingly making use of benefits transfer in benefit-cost assessments of environmental policy. An important question is how big the resultant errors are, and how sensitive errors are to how the transfer is conducted. We employ a choice experiment focusing on landscape attributes to investigate the sensitivity of transfer error to procedures. The main findings are that errors depend on the choice of study site at which original valuations are sought, on whether a single site or pooled model is used; and that adding more information by pooling sites does not always seem to be economically desirable.

Suggested Citation

  • Sergio Colombo & Nick Hanley, 2008. "How Can We Reduce the Errors from Benefits Transfer? An Investigation Using the Choice Experiment Method," Land Economics, University of Wisconsin Press, vol. 84(1), pages 128-147.
  • Handle: RePEc:uwp:landec:v:84:y:2008:i:1:p:128-147
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    References listed on IDEAS

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    1. Yong Jiang & Stephen Swallow & Michael Mcgonagle, 2005. "Context-Sensitive Benefit Transfer Using Stated Choice Models: Specification and Convergent Validity for Policy Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(4), pages 477-499, August.
    2. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, May.
    3. Sergio Colombo & Nick Hanley & Javier Calatrava-Requena, 2005. "Designing Policy for Reducing the Off-farm Effects of Soil Erosion Using Choice Experiments," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 81-95.
    4. Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Nick Hanley & Simanti Banerjee & Gareth D. Lennox & Paul R. Armsworth, 2012. "How should we incentivize private landowners to ‘produce’ more biodiversity?," Oxford Review of Economic Policy, Oxford University Press, vol. 28(1), pages 93-113, Spring.
    2. Mark J. Koetse & Erik T. Verhoef & Luke M. Brander, 2017. "A generic marginal value function for natural areas," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(1), pages 159-179, January.
    3. Espinosa, Maria & Rodriguez, Macario & Madureira, Livia Maria Costa & Santos, Jose Lima & Gomez y Paloma, Sergio, 2014. "Are models and respondents talking the same language: evidence from stated and inferred discontinuous preferences in a choice experiment valuing public goods?," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182668, European Association of Agricultural Economists.
    4. Windle, Jill & Rolfe, John, 2013. "The limitations of applying benefit transfer to assess the value of ecosystem services in a “generic” peri-urban, coastal town in Australia," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152183, Australian Agricultural and Resource Economics Society.
    5. repec:eee:jeeman:v:85:y:2017:i:c:p:110-129 is not listed on IDEAS
    6. 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).
    7. Holland, Benedict M. & Johnston, Robert J., 2015. "Capturing More Relevant Measures of Spatial Heterogeneity in Stated Preference Willingness to Pay: Using an Iterative Grid Search Algorithm to Quantify Proximate Environmental Impacts," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205450, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    8. de Ayala, Amaia & Hoyos, David & Mariel, Petr, 2015. "Suitability of discrete choice experiments for landscape management under the European Landscape Convention," Journal of Forest Economics, Elsevier, vol. 21(2), pages 79-96.
    9. Sagebiel, Julian & Glenk, Klaus & Meyerhoff, Jürgen, 2017. "Spatially explicit demand for afforestation," Forest Policy and Economics, Elsevier, vol. 78(C), pages 190-199.
    10. Londoño, Luz M. & Johnston, Robert J., 2012. "Enhancing the reliability of benefit transfer over heterogeneous sites: A meta-analysis of international coral reef values," Ecological Economics, Elsevier, vol. 78(C), pages 80-89.
    11. Stephen Hynes & Daniel Norton & Nick Hanley, 2013. "Adjusting for Cultural Differences in International Benefit Transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(4), pages 499-519, December.
    12. Kosenius, Anna-Kaisa & Markku, Ollikainen, 2015. "Ecosystem benefits from coastal habitats—A three-country choice experiment," Marine Policy, Elsevier, vol. 58(C), pages 15-27.
    13. Schaafsma, Marije & Brouwer, Roy & Liekens, Inge & De Nocker, Leo, 2014. "Temporal stability of preferences and willingness to pay for natural areas in choice experiments: A test–retest," Resource and Energy Economics, Elsevier, vol. 38(C), pages 243-260.
    14. Soliño, Mario & Farizo, Begoña A. & Campos, Pablo, 2009. "The influence of home-site factors on residents' willingness to pay: An application for power generation from scrubland in Galicia, Spain," Energy Policy, Elsevier, vol. 37(10), pages 4055-4065, October.
    15. Hynes, Stephen & Norton, Daniel & Hanley, Nick, 2012. "Accounting for Cultural Dimensions in Estimating the Value of Coastal Zone Ecosystem Services using International Benefit Transfer," Working Papers 148828, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
    16. 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.
    17. Holland, Benedict M. & Johnston, Robert J., 2014. "Spatially-Referenced Choice Experiments: Tests of Individualized Geocoding in Stated Preference Questionnaires," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170191, Agricultural and Applied Economics Association.
    18. Catalina M. Torres Figuerola & Antoni Riera Font, 2009. "Defining environmental attributes as external costs in choice experiments: A discussion," CRE Working Papers (Documents de treball del CRE) 2009/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
    19. Johnston, Robert J. & Duke, Joshua M., 2010. "Socioeconomic adjustments and choice experiment benefit function transfer: Evaluating the common wisdom," Resource and Energy Economics, Elsevier, vol. 32(3), pages 421-438, August.
    20. Klaus Glenk & Julia Martin-Ortega & Manuel Pulido-Velazquez & Jacqueline Potts, 2015. "Inferring Attribute Non-attendance from Discrete Choice Experiments: Implications for Benefit Transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(4), pages 497-520, April.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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