Benefit Transfer: A Comparison of Approaches

ABSTRACT Benefit transfer has become increasingly important for policy researchers as a low‐cost approach for assigning benefits to environmental amenities. To gain insights on how to best perform benefit transfer, this study analyzes estimates from both the travel cost (TC) and contingent valuation (CV) methods. The analysis compared the point estimate approach with the benefit function approach for transferring economic benefits between a study site and a policy site. Data from the 1996 National Survey of Fishing, Hunting, and Wildlife‐Associated Recreation for deer hunting was used to provide both the CV willingness‐to‐pay and the TC consumer surplus estimates. The study found that when focusing on a nonsite‐specific activity such as deer hunting, benefits transferred fairly well, with the average error being slightly less than 30 percent for CV estimates and just under 35 percent for TC estimates. In addition, the empirical results suggest that the more precise benefit function approach provide some improvement to the more general point estimate approach, with the CV methods showing moderate gains while the TC method showing only minimal gains. The study also found that the closer the distance between the policy and research sites was, the more the precision of the benefit transfer increased.