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Does Benefit Transfer Always Work: a Multi-country Comparison

Author

Listed:
  • Abou-Ali, Hala

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Belhaj, Mohammed

    (IVL)

Abstract

This paper analyzes the welfare effects of a 50 percent reduction in air pollution caused by road traffic in both Cairo (Egypt) and Rabat-Salé (Morocco) using a contingent valuation method with identical elicitation questions. Despite the fact that both the numbers of inhabitants and vehicles are higher in Cairo the willingness to pay to reduce the impacts of vehicle emissions is higher in Rabat-Salé although incomes are rather similar in both cities. This paper shows that the relatively often-used benefit transfer frequently leads to biases where damage costs are under- or overestimated.

Suggested Citation

  • Abou-Ali, Hala & Belhaj, Mohammed, 2005. "Does Benefit Transfer Always Work: a Multi-country Comparison," Working Papers in Economics 158, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0158
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    File URL: http://hdl.handle.net/2077/2767
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    References listed on IDEAS

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    1. Nick Hanley & Clive L. Spash, 1993. "Cost–Benefit Analysis and the Environment," Books, Edward Elgar Publishing, number 205.
    2. 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.
    3. Rowe, Robert D. & D'Arge, Ralph C. & Brookshire, David S., 1980. "An experiment on the economic value of visibility," Journal of Environmental Economics and Management, Elsevier, vol. 7(1), pages 1-19, March.
    4. World Bank, 2002. "Arab Republic of Egypt : Cost Assessment of Environmental Degradation," World Bank Publications - Reports 15323, The World Bank Group.
    5. Costanza, Robert & d'Arge, Ralph & de Groot, Rudolf & Farber, Stephen & Grasso, Monica & Hannon, Bruce & Limburg, Karin & Naeem, Shahid & O'Neill, Robert V. & Paruelo, Jose, 1998. "The value of the world's ecosystem services and natural capital," Ecological Economics, Elsevier, vol. 25(1), pages 3-15, April.
    6. Shechter, M. & Kim, M., 1991. "Valuation of pollution abatement benefits: Direct and indirect measurement," Journal of Urban Economics, Elsevier, vol. 30(2), pages 133-151, September.
    7. 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(2), pages 351-371, May.
    8. Roy Brouwer & Frank Spaninks, 1999. "The Validity of Environmental Benefits Transfer: Further Empirical Testing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 95-117, July.
    9. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    10. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    11. Mohammed Belhaj, 2003. "Estimating the benefits of clean air contingent valuation and hedonic price methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 3(1), pages 30-46.
    12. William H. Desvousges & F. R. Johnson & H. S. Banzhaf, 1998. "Environmental Policy Analysis With Limited Information," Books, Edward Elgar Publishing, number 1328.
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    Cited by:

    1. Ghanem, Samar & Ferrini, Silvia & Di Maria, Corrado, 2023. "Air pollution and willingness to pay for health risk reductions in Egypt: A contingent valuation survey of Greater Cairo and Alexandria households," World Development, Elsevier, vol. 172(C).
    2. 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.
    3. Ready, Richard & Navrud, Stale, 2006. "International benefit transfer: Methods and validity tests," Ecological Economics, Elsevier, vol. 60(2), pages 429-434, December.
    4. 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.
    5. Guofang Zhai, 2011. "International differences in willingness to pay for reduced risks due to risk representation: evidence from cross-country surveys in Northeast Asia," Journal of Risk Research, Taylor & Francis Journals, vol. 14(10), pages 1177-1190, November.

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    More about this item

    Keywords

    Air pollution; Benefit transfer; Contingent valuation; Willingness to pay;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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