Science Inventory

Benefit transfer challenges: Perspectives from U.S. Practitioners

Citation:

Newbold, S., D. Simpson, M. Massey, Matt Heberling, W. Wheeler, J. Corona, AND J. Hewitt. Benefit transfer challenges: Perspectives from U.S. Practitioners. Environmental and Resource Economics. Springer, New York, NY, 69:467-481, (2018). https://doi.org/10.1007/s10640-017-0207-7

Impact/Purpose:

This essay reviews EPA's use of benefit transfer for national regulations.

Description:

In the field of environmental economics, the use of benefit estimates reported in existing nonmarket valuation studies to calculate willingness to pay for new policy cases has come to be known as “benefit transfer.” To make quantitative statements about the likely effects of public policies, economists must extrapolate findings from previous empirical studies to new policy scenarios. Because the EPA necessarily makes extensive use of benefit transfer, the Agency has a strong interest in developing standards for its application and improving the methods and data available to analysts when conducting benefit-cost analyses (BCAs). In this essay, we describe some of the main benefit transfer challenges that EPA analysts continue to face on a regular basis. Our discussion is loosely structured by reference to the basic steps of an idealized benefit transfer, so we begin with a brief outline of those steps. As we proceed we highlight some of the remaining open questions where we believe further research or refinement of existing benefit transfer methods holds the greatest promise for increasing the credibility of BCAs conducted by the EPA.