EVALUATING THE PERFORMANCE OF BENEFIT TRANSFER - AN EMPIRICAL INQUIRY

Benefit transfers are used by public agencies needing information on c osts and benefits of policy decisions, although scientific debate rega rding the validity of benefit transfer is ongoing. This article develo ps a methodology to evaluate the performance of direct benefit transfe r and benefit function transfer and applies the methodology to two pai rs of similar non-market amenities. Empirical results indicate that be nefit function transfer is more robust than transfer of average site b enefits. Our results suggest that the circumstances under which benefi t function transfer provides valid, policy-relevant information may be limited and that errors from applying benefit transfer can be quite l arge, even across seemingly similar amenities. (C) 1997 Academic Press .