The transferability of benefit transfer: contingent valuation of water quality improvements in Costa Rica

Identical contingent valuation studies of willingness-to-pay (WTP) for improvements in coastal water quality were conducted in the town of Jaco and city of Puntarenas on the Pacific Coast of Costa Rica. Several common hypotheses for benefit transfer reliability were tested for the transfer of WTP estimates between the two communities, as well as between districts within Puntarenas. This study finds no basis for the claim that the reliability of benefit transfer increases with proximity between the study site where WTP estimates are taken from, and the policy site estimates are transferred to. The claim that transfer of WTP adjusted by the benefit function outperforms transfers of unadjusted or simple income-adjusted WTP is rejected for this particular study. Results also show that census-type socio-economic site characteristics are necessary, but not sufficient to explain site-specific differences in WTP. The trade-offs in designing valid and reliable benefit transfer studies with transferable results are discussed. (C) 2002 Elsevier Science B.V. All rights reserved.