Structural Benefits Transfer: Tying Utility Theory to Ecosystem ValuationEPA Grant Number: R830923
Title: Structural Benefits Transfer: Tying Utility Theory to Ecosystem Valuation
Investigators: Pattanayak, Subhrendu , Smith, V. Kerry , Van Houtven, George L.
Institution: Desert Research Institute , North Carolina State University
EPA Project Officer: Hahn, Intaek
Project Period: July 1, 2003 through December 31, 2007
Project Amount: $260,000
RFA: Decision-Making and Valuation for Environmental Policy (DMVEP) (2002) RFA Text | Recipients Lists
Research Category: Economics and Decision Sciences
A key limitation of conventional approaches to ecosystem valuation is that they propose partial equilibrium solutions to fundamentally general equilibrium problems. A more comprehensive and theoretically consistent approach to ecosystem valuation will require a strategy for integrating information from a wide variety of sources. By drawing on and extending "preference calibration" methods for benefit transfer and general equilibrium modeling approaches, we will develop an approach that we refer to as "structural benefits transfer." We propose to test and expand the preference calibration logic to include a wider array of environmental resources and services and, in the process, develop guidelines for practical and defensible benefits assessment methods for broad-based environmental initiatives.
Our objective is to continue the process of developing innovative and integrated approaches to benefit transfer for broad-based environmental policy evaluation. A key part of this process is to test the robustness of the preference calibration method via a set of interrelated conceptual and empirical tasks. By linking benefits transfer to the underlying preference structure in a variety of settings and by exploring its applications to green accounting, we hope to strengthen and broaden the scope of benefit transfer for ecosystem valuation.
Our testing strategy will leverage conceptual frameworks, meta-data sets, and research collaborations we have developed. Specifically, we will conduct three applications of preference calibration for air, forest, and wetland resources; and estimate preference parameters using generalized method of moments on a meta-data set of water quality values.
By tying benefits transfer methods to the underlying preference structure, the proposed research will develop guidelines for practical and credible methods for estimating benefits of broad-based environmental policies. The case study applications and extensions of the preference calibration approach will evaluate the feasibility of developing fully integrated benefit assessment methods, including structural meta-analysis using multi-sample generalized method of moments.