Testing the stability of the benefit transfer function for discrete choice contingent valuation data

Abstract

We examine the stability of the benefit transfer function across 42 recreational forests in the British Isles. A working definition of reliable function transfer is put forward, and a suitable statistical test is provided. The test is based on the sensitivity of the model log-likelihood to removal of individual forest recreation sites. We apply the proposed methodology on discrete choice contingent valuation data and find that a stable function improves our measure of transfer reliability, but not by much. We conclude that, in empirical studies on transferability, function stability considerations are secondary to the availability and quality of site attribute data. Modellers’ can study the advantages of transfer function stability vis-à-vis the value of additional information on recreation site attributes.