Value transfer method

Value transfer method

Suitability for the forest ecosystem services to be valued:
All forest services, however, it was showed that it is more reliable for transferring use values
Description of the method:
Value transfer method it is not a straightforward direct method, because it would also be possible to transfer results from indirect methods. It is used to estimate economic values for ecosystem services by transferring the available information from studies already completed in another location and/or context. Value transfer method is not a valuation method as such, but it is a method that involves transferring economic estimates from previous studies of similar changes in environmental quality to value the environmental change at the policy site. Thus, the basic goal of benefit transfer is to estimate benefits for one context by adapting an estimate of benefits from some other context. There are two main forms of the value transfer method:
Unit Value Transfer is the simplest method which builds on the transfer of actual value estimates from other studies, appropriately adjusted for inflation, the differences in purchasing power of income across regions and, in some cases, the income variation.
Function Transfer approach – it is more ambitious and suggests transferring value functions from other studies. The benefit function statistically relates people willingness to pay to ecosystem characteristics and the people whose values were elicited
Benefits of the method:
Typically less costly than conducting an original valuation study
Economic benefits can be estimated more quickly than when undertaking an original valuation study
The method can be used as a screening technique to determine if a more detailed, original valuation study should be conducted
Limitations of the method:
Value transfer may not be accurate, except for making gross estimates of recreational values, unless the sites share all of the site, location, and user specific characteristics
Good studies for the policy or issue in question may not be available
It may be difficult to track down appropriate studies, since many are not published
Reporting of existing studies may be inadequate to make the needed adjustments
Adequacy of existing studies may be difficult to assess
Extrapolation beyond the range of characteristics of the initial study is not recommended
Value transfers can only be as accurate as the initial value estimate
Unit value estimates can quickly become dated