Evaluating the accuracy of the benefit transfer method: A rural water supply application in the USA

Due to declining federal, state, and local government budgets, there is an increasing need to analyze the benefits of government funded programs to de termine where increasingly limited funds would best be spent. The benefit t ransfer technique is analyzed for the development of a rural water supply s ystem and guidelines for successful benefits transfer are presented. Benefi t transfer appears to provide reasonably accurate estimates of natural reso urce benefits if a broad based benefit model is used. The benefits-transfer -based estimates are accurate as long as a model based on data from a wide variety of conditions is used or the model is based on data from a very sim ilar region. The wide-based data modeling approach has the greatest practic al application. These findings are based upon contingent valuation data obt ained from four sites in the western USA. (C) 2001 Academic Press.