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Choice Modeling and Tests of Benefit Transfer
Author(s) -
Morrison Mark,
Bennett Jeff,
Blamey Russell,
Louviere Jordan
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00250
Subject(s) - choice modelling , valuation (finance) , econometrics , contingent valuation , sample (material) , computer science , quality (philosophy) , transfer (computing) , cost–benefit analysis , economics , willingness to pay , microeconomics , statistics , mathematics , ecology , philosophy , chemistry , finance , chromatography , epistemology , parallel computing , biology
Benefit transfer is increasingly being used by decision makers as a way of estimating environmental values suitable for use in benefit cost analysis. However, recent studies examining the validity of benefit transfer of passive use values estimated using contingent valuation have rejected the hypothesis of convergent validity. In this article, we demonstrate the usage of a form of conjoint analysis known as choice modeling for benefit transfer. Choice modeling has been touted as being particularly suitable for benefit transfer because it is possible to allow for differences in environmental quality and socioeconomic characteristics when transferring benefit estimates. We demonstrate that choice modeling is suitable for benefit transfer, particularly when the transfers involve implicit prices. Second, we examine the circumstances in which benefit transfer of choice modeling derived value estimates is likely to be most valid. Two split sample tests were undertaken to achieve this objective. The evidence from these tests indicates that transfers across different case study sites are likely to be subject to less error than those across different populations.