The benefit transfer method relies on secondary data, and is used to estimate nonmarket economic values by transferring available information from original studies already completed. The source(s) of the available economic information is typically referred to as the “study site,” and the context that this information is used in is referred to as the “policy site.” There are two main approaches to benefit transfer: value transfer and function transfer. In a value transfer, a single point estimate, range of multiple point estimates, or measure of central tendency from multiple point estimates (e.g., an average value), is transferred from the original study site(s) where primary research was conducted, to a policy site with similar characteristics that is being evaluated. In a function transfer, a statistical function based on the existing literature is used to implement the transfer of a benefit measure. Function transfers can be based on a benefit or demand function from a single study in the existing literature, or on a meta-regression function, which summarizes the value estimates reported in multiple studies in a statistical function. The function is adapted to match the characteristics of the policy site that is being evaluated, and then used to forecast a nonmarket value estimate for the policy site.
Criteria for a Valid Transfer
As outlined by Boyle and Bergstrom (1992), there are three main criteria to follow for a valid benefit transfer:
- The nonmarket commodity valued at the study site and policy site are identical;
- The populations affected by the nonmarket commodity at the study and policy sites have identical characteristics; and
- The assignment of property rights at both sites must lead to the same theoretically appropriate welfare measures (e.g., willingness to pay).
Point Estimate Transfer
Average Value Transfer
Meta-Regression Function Transfer
Rosenberger, R. and Loomis, J. 2003. Benefit transfer, in Champ, P.A., Boyle, K.J., Brown, T.C. (Eds.), A primer on nonmarket valuation. Boston, Kluwer Academic Publishers, p. 395-444.
Rosenberger, R.S., and Loomis, J.B. 2001. Benefit transfer of outdoor recreation use studies: A technical document supporting the Forest Service Strategic Plan (2000 revision). General Technical Report RMRS-GTR-72,
USDA Forest Service, Rocky Mountain Research Station, Fort Collins, CO.
Rosenberger, R.S., and Stanley, T.D., 2006. Measurement, generalization, and publication: sources of error in benefit transfers and their management. Ecological Economics 60(2), 372–378.
Wilson, M.A., and Hoehn, J.P. 2006. Environmental benefits transfer: methods, applications and new directions benefits transfer special issue. Ecological Economics 60(2), 335-482.