Richard C. Ready discusses advances in environmental benefit transfer. The advantage of utility function transfer over unit value transfer is that unit value transfer is valid only if the policy and the study sites are similar in the good being valued, the site characteristics, and the relevant populations. Regarding utility function transfer, if choice data are available from more than one source study, that data must somehow be aggregated into one estimated utility function. Conceptually, the most straightforward approach would be to stack the data-sets from the several source studies, so that each choice from each source study is a unique unit of observation, and estimates a utility function directly. The issue of robustness is particularly important because studies that use preference calibration tend to use forms for the utility function that, while motivated by theory, have not been widely tested empirically in non-market valuation contexts.
All Science Journal Classification (ASJC) codes
- Agricultural and Biological Sciences (miscellaneous)
- Economics and Econometrics