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THE DECISION TO USE BENEFIT TRANSFER OR CONDUCT ORIGINAL VALUATION RESEARCH FOR BENEFIT‐COST AND POLICY ANALYSIS
Author(s) -
ALLEN BRYON P.,
LOOMIS JOHN B.
Publication year - 2008
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2007.00066.x
Subject(s) - recreation , nonmarket forces , valuation (finance) , economics , cost–benefit analysis , actuarial science , public economics , policy analysis , econometrics , microeconomics , finance , ecology , political science , factor market , law , biology
We develop a method for determining the economic returns to using original valuation research rather than benefit transfer to estimate nonmarket values for policy analysis purposes. We provide a method to guide policymakers in determining the project sizes for which original research can be expected to yield positive returns in terms of reduced decision errors. We then provide an empirical example of how our method can be applied to the estimation of recreation benefits and provide simple guidance to policymakers regarding the relationship between project size and expected returns to original valuation research to estimate recreation benefits. ( JEL H43, Q51, Q26)