Benefit Transfer

Bangkok 2013

When to use benefit transfer?

• Project has small budget, cannot do primary valuation

• Many suitable valuation studies available

What is benefit transfer?

• Extrapolate from valuation studies done elsewhere to own site

• For example, use value of natural mangrove forest in Sundarbon in southwest Bangladesh to value planted mangrove in south central Bangladesh

• Ideal to use similar environmental good in similar society

Method

• Use value of site, value per hectare, or valuation function– Want most similar comparison– E.g. two similar sites- use value of site– Small site versus large site- value per hectare– Natural site versus manmade- use valuation

function that recognizes two have different values

Across Countries

• Best to use values from own country• Must adjust for income if use values across

countries- many sites have income elasticity near 1- values proportional to income

• Adjust for known differences between countries- some species or places have high values to a specific culture

Limitation

• Failure to find close substitute– Compare a tree to an air conditioner for cooling• May be closer to an umbrella

– Compare a polar bear to a snail• Keystone species worth much more than non-

mammals– Compare remote beach to Miami Beach• Places close to large populations are worth more than

inaccessible sites– Rank sites by NPP• People rarely value natural sites for NPP

References• “Environmental Valuation in South Asia” by

A. K. Enamul Haque, M. N. Murty, and Priya Shyamsundar, 2011

• “The International Handbook On Non-Market Environmental Valuation” by Jeff Bennett 2011

• “Valuing the Environment in Developing Countries: Case Studies” by David Pearce, Corin Pearce, Charles Palmer 2002

• “Economic valuation of the environment: Methods and case studies” by Guy Garrod and K.G. WIllis 1999

• “Valuing Environmental Preferences: Theory and Practice of the Contingent Valuation Method in the US, EU, and Developing Countries” Ian Bateman and K.G. Willis 2001