The Validity of Environmental Benefits Transfer: Further Empirical Testing

This paper provides further empirical evidence of the validity of environmental benefits transfer based on CV studies by expanding the analysis to include control factors which have not been accounted for in previous studies. These factors refer to differences in respondent attitudes. Traditional population characteristics were taken into account, but these variables do not explain why respondents from the same socio-economic group may still hold different beliefs, norms or values and hence have different attitudes and consequently state different WTP amounts. The test results are mixed. The function transfer approach is valid in one case, but is rejected in the 3 other cases investigated in this paper. We provide further evidence that in the case of statistically valid benefits transfer, the function approach results in a more robust benefits transfer than the unit value approach. We also show that the equality of coefficient estimates is a necessary, but insufficient condition for valid benefit function transfer and discuss the implications for previous and future validity testing.     

Who enjoys ‘TRIPs’ abroad? An empirical analysis of intellectual property rights in the Uruguay Round

Abstract.  Analysis of the Uruguay Round is extended by quantifying the impact of the TRIPs agreement. The static costs of raising the standards of patent protection are captured by the transfers of income between countries, with the majority of countries estimated to make net payments abroad, the United States being a major beneficiary. To offset these transfers the model provides estimates of the dynamic benefits from the greater incentive to innovate, revealing that there is potential for all countries to benefit from the TRIPs agreement in the long run. However, the distribution of these benefits is highly skewed towards developed countries. JEL classification: O34, F43     

Are government transfers harmful to economic growth? A meta-analysis

A common perception is that government transfers are harmful to economic growth. However, existing empirical evidence on this point is mixed. Potential reasons for these conflicting results include differences in the level of economic development of the countries studied, different estimation methods and different measures of government transfers. By conducting a meta-analysis of 149 estimates reported in 23 studies, we sought to understand if – and if so, to what extent – government transfers are harmful to economic growth, as well as how important the abovementioned reasons are in explaining different findings in the literature. We found that government transfers are more detrimental to economic growth in developed countries compared to less-developed countries because such transfers can have a non-monotonic effect on growth. When government transfers are substantial, as they are in developed countries, they tend to reduce growth. We also found that the growth effects of government transfers are sensitive to the measurement of the transfers, i.e., studies that use unemployment benefits instead of social security tend to report a stronger negative growth effect.     

Understanding Error Structures and Exploiting Panel Data in Meta-analytic Benefit Transfers

A regression meta-analysis is a statistical summary of results from a set of empirical studies. While, a meta-analysis is typically used to drawn inferences regarding the collective insights from an empirical literature, a regression meta-analysis can also be used to predict outcomes as a substitute for the conduct of a new study. Within the nonmarket-valuation literature benefit transfers are a special case of prediction where value estimates collected for one purpose are used as a basis for predicting value for unstudied applications. Balancing against the prediction opportunities provided by a regression meta-analysis is the potential prediction error. This paper considers some of these issues in the estimation of a regression meta-analysis to support prediction of nonmarket values for applications where an original study does not exist. We do not purport to address all elements of the error structure and prediction issues, but to present a more coherent focus to enhance future research on the validity and reliability of benefit-function transfers, and ultimately assist in enhancing the credibility of benefit transfers to support policy analyses.     

The biodiversity conservation game with heterogeneous countries

Biodiversity is an essential resource, which we classify as conditionally-renewable. In order to achieve conservation and sustainable use of biodiversity virtually all nation states signed the United Nations Convention on Biological Diversity. In this paper we investigate how the heterogeneity of countries in regard to ecosystems and wealth influences the stability of international biodiversity conservation agreements both without and with transfers. We further examine the effect of different degrees of ecosystem substitutability. We model a coalition formation game with players that have a continuous conservation choice. The conservation benefit is dependent on wealth and ecosystem quality. Aggregation of global benefits respects differences in ecosystem substitutability. In case of transfers, a fund redistributes coalition benefits according to a sharing rule. The main finding is that in the absence of transfers, compared to the homogeneous situation, heterogeneity in ecosystems and wealth reduces the size of a stable coalition. The destabilising effect is stronger the higher the ecosystem substitutability. Optimal transfers facilitate a large stable coalition.     

Valuing cultural heritage in developing countries: comparing and pooling contingent valuation and choice modelling estimates

A substantial part of the United Nation’s World Heritage Sites (WHSs) can be found in developing countries, but many of them are in a bad state. Thus, there is a need to document the social benefits of these global goods in order to justify the costs of restoration and preservation programmes (RPPs). This study adds to the scarce literature on economic benefits of WHSs in developing countries, and reduces the need to perform very uncertain benefit transfers from European or US valuation studies. We apply Contingent Valuation (CV) and Choice Modelling (CM) to estimate the social benefits of RPPs for the My Son world cultural heritage site in Vietnam; both to foreign visitors and the local residents. We then compare the estimates from the CV and CM methods, and pool the results from the two methods. The results show that both CV and CM are suited to estimating the economic benefits of preserving cultural heritage of My Son. The two methods produce very similar results, which can be interpreted as a test of convergence validity. The pooling results give evidence to show that the CV and CM models have the same underlying preference structures. Thus, these valuation models can be successfully used in cost-benefit analyses to assess the benefits to cultural heritage of measures to reduce air pollution, soil erosion, climate change and other causes to deterioration of cultural heritage sites.

Meta-Modeling and Benefit Transfer: The Empirical Relevance of Source-Consistency in Welfare Measures

A common assumption within the meta-analysis and benefit transfer literature is that the validity of benefit predictions depends on the utility-theoretic consistency of welfare measures in underlying source studies. However, to date there exists little evidence as to the empirical relevance of this proposition in terms of the accuracy or efficiency of predicted benefits. Using Bayesian Model Search techniques we examine whether different portions of metadata, distinguished by underlying welfare construct, share common willingness-to-pay distributions. Applying our algorithm to two separate meta-datasets we find strong evidence of information sharing across welfare categories for a large subset of contexts. For cases where information sharing is indicated, substantial efficiency gains in predicted benefits can be achieved by pooling the underlying data.     

Transferring Measures of Adult Health Benefits to Children: A Review of Issues and Results

This article discusses issues involved in inferring the economic value of children's health from estimates of the value of adult health. A central theme is that if health benefit transfers across individuals are to be useful to policy makers, they must be founded on analytical as well as statistical commonalities. Whether the health benefits transfer issue is among adults or between adults and children, a vision that embeds the individual in a collective entity, such as a family with limited time and resources, can provide a common analytical structure having substantive economic content and able to accommodate varying measures of health. (JEL I , D1 , Q2 )     

REGIONAL SOCIAL ACCOUNTS FOR THE UNITED KINGDOM1

Estimates of gross domestic product have been produced by various writers or agencies for Scotland, Wales, and Northern Ireland, and for Wales there are estimates of expenditure also; but only a very tentative attempt has hitherto been made at estimates for the English regions, mainly because the data present difficulties. In the present investigation, in which the estimates in the Bluebook on National Income and Expenditure are partitioned between regions, item by item, a production method was first explored, but this was replaced by use of Inland Revenue data on employment and self-employment income, and production and miscellaneous sources on profits etc. Estimates of expenditure raise particular difficulties in regard to private capital formation and, for different reasons, some parts of public current expenditure. The estimates have been used to throw light on interregional variations in income produced per head and earnings per head, and their relation to activity rates and industrial structure. The flows of property income, and of public transfers of purchasing-power and benefits between regions are also explored, along with regional current balances and evidence bearing on differences in pressure of demand. Finally, the scope for the development of regional social accounting in the United Kingdom is discussed.     

Crowding out of private support to the elderly: Evidence from a demogrant in Mexico

To examine whether private support dampens or reinforces the impact of redistributive policies, this paper estimates the effect of an exogenous increase in the income of the elderly, caused by a recent demogrant in Mexico, on the amount of private transfers they receive. My instrumental variables strategy overcomes the endogeneity of income that typically contaminates estimates and, unlike related studies that use natural or policy experiments in reduced-form estimations, it yields evidence of a positive bias. This suggests that an unobservable characteristic is positively correlated both with income and private transfer receipt and that treating income as exogenous could lead to an underestimation of the crowding out effect. In contrast, my preferred estimates are negative, significant and not far from minus one, implying an almost complete crowding out. My findings suggest that private transfers could neutralize the changes in the public transfers for the elderly.     

Validity Tests of Benefit Transfer – Are We Performing the Wrong Tests?

The validity of environmental benefit transfer has been tested on numerous occasions assuming classical null hypothesis of equality. We argue against this assumption on the basis of theory, which clearly indicates that environmental benefits should be assumed to vary from context to context. We suggest the use of equivalence testing as a more appropriate and a clear compliment to the shortcomings of classical tests. Equivalence tests test the null hypothesis of difference between the original and transferred value estimates. Equivalence tests also combine the concepts of statistical significance and policy significance into one test, by defining an acceptable transfer error prior to the validity test. The results of a published study on validity of benefit transfer are reversed when subjected to an equivalence test.JEL classifications: Q26, C12     

Rational Poverty or Poor Rationality? The Take‐up of Social Assistance Benefits

In several countries social assistance dependence has been increasing since the 1980s. After surveying the theoretical and empirical take-up literature, this study presents estimates of recent rates of non take-up of social assistance benefits. Once methodological shortcomings of prior estimations are corrected, the results show that take-up has fallen recently and thus cannot explain the rising welfare receipt. Following theoretical predictions, the probability that a rational individual takes up social assistance increases with the expected benefit amount and duration, and falls with application cost and stigma. More than half of all households eligible for transfers under the German social assistance program did not claim their benefits.     

INTERFAMILY TRANSFERS AS ALTERNATIVES TO GOVERNMENT TRANSFERS TO PERSONS*

How have government transfers altered the distribution of income, the level of work effort, and the rate of personal saving? Most scholars approach this question by comparing the current level of government transfers with the unrealistic counterfactual of a zero-transfer situation. This method overlooks the fact that nongovernment transfers existed before government transfers and the possibility that private transfers might have grown more if government transfers had grown less. This paper explores the significance of one private alternative to government transfers-namely, direct interfamily giving of cash, food, and housing. Fragmentary evidence suggests that such interfamily transfer was quantitatively more important than governmental transfer for these purposes thirty years ago, but is now only half as great. If current government transfers are conversions of, or substitutes for, interfamily transfers, then it follows that some of the benefits of government transfer “slide” over to “secondary beneficiaries,” i.e. those who would have made the private transfers. Further, it follows that the effects of government transfers are not much different from those of the private transfers which they replace.     

The Public Finances of the United Kingdom: a re-interpretation

This paper presents evidence concerning the distributive activities of the UK state with regards to labour. A methodology is developed which assesses both the costs and the benefits of the UK state to labour. Applying such a methodology to the UK national accounts demonstrates that the taxes paid by labour exceed the benefits of social spending received by labour. Thus, there has been a net transfer of resources from labour to other social sectors. It can therefore be argued that the UK state both horizontally re-circulates income within labour and transfers resources vertically from wages and consumption to profits, investment and the state.     

Choice experiments,site similarity and benefits transfer

Choice experiments are designed to account for variations in environmental resources and site characteristics, as well as potential implications of these variations for willingness to pay. As a result, choice experiment results may be well suited for benefits transfer. It is unclear, however, whether the flexibility of choice experiments renders the similarity of study and transfer sites less critical for transfer validity. Drawing from identical choice experiments conducted in different Rhode Island communities, this model assesses the extent to which error in function-based benefits transfer is related to the similarity of communities across a variety of observable dimensions. Results suggest that site similarity, at least across some dimensions, influences the validity of choice experiment benefits transfers. However, the use of some measures of similarity as indicators of transfer error may provide misleading results.     

National and International Benefit Transfer Testing with a Rigorous Test Procedure

Benefit transfer, as a mean to transfer values from existing monetary valuation studies to new policy sites, has been in use for many years. This paper aims to analyze the forecasting quality of benefit transfer by applying a rigoroust-test – also referred to as Accuracy-t-test – that takes into account testing errors which were made in previous surveys. Beside the analysis of national benefit transfers based on two German contingent valuation studies additional efforts were made to investigate into the validity and accuracy of international benefit transfer by considering two Norwegian studies that employed a similar survey design.     

Do Existence Values for Cost Benefit Analysis Exist?

The use of the contingent valuation method to generate estimates of existence value for input to cost benefit analysis requires that individuals have utility functions defined over the relevant arguments. The validity of the assumption that the required utility functions generally exist has been questioned. It has been argued that some individuals will respond on the basis of lexicographic preference orderings. It has also been argued that some individuals do not consider that market, or individual willingness to pay, criteria are appropriate where existence value type issues are at stake. The paper considers survey evidence bearing upon these arguments. It is concluded that the evidence is consistent with the view that it is incorrect to proceed on the assumption that individuals generally satisfy the assumptions required for the existence of existence values for use in cost benefit analysis.     

Preferences for redistribution and exposure to tax-benefit schemes in Europe

This paper provides evidence that attitudes towards redistribution are associated with the extent of generosity of the redistributive context experienced by the individual, as measured by the likelihood of receiving positive benefit transfers net of fiscal contribution. We estimate reduced form tax-benefit equations with the EU Statistics on Income and Living Conditions (EU-SILC), and match the implied parameters to the respondents of the European Social Survey (ESS) on the basis of their characteristics. The period of analysis is 2008–2016. For identification, we exploit exogenous cross-country and time variation in tax rules and market income to disentangle implications of exposure to tax-benefit rules on preferences for redistribution from the effects of changes in income inequality. We find that exposure to positive net benefits increases support for redistribution by 1.4%–3% on baseline models, the effect being robust across a variety of specifications.     

THE ECONOMIC WELFARE OF THE AGED AND INCOME SECURITY PROGRAMS*

This paper examines several nonmoney components of economic welfare in both a theoretical and an empirical framework, computes the distributional ranking of aged families arising from such a measure, and subsequently examines the target effectiveness of eleven programs of the U.S. federal government aimed at the aged. While the theoretical discussion attempts to cover all factors contributing to the economic welfare of the aged, the empirical measure is somewhat less comprehensive, excluding the value of nonmarket productive activities and leisure time as well as benefits derived from direct government expenditures and some in-kind transfers and taxes. The study makes use of a subsample of the 1967 Survey of Economic Opportunity data composed of all families with at least one aged member. Specific attention is devoted to dissaving from net worth, in-kind transfers, incidence of taxes, and intrafamily transfers. Government cash and in-kind transfers are found to constitute a third of the total measured economic welfare of the aged, and the impact of each of these programs is examined individually. As might be expected, public assistance and public housing are the programs of most benefit to the aged poor. Medicaid and Medicare are substantially less so, and Social Security is distributionally neutral. Such programs as unemployment insurance are of little benefit to the aged. Tax expenditures, finally, provide no benefits to even the lower half of the distribution.     

Social transfers and conditionalities under different regime types

This paper examines the implications of political factors for social policy choices. Specifically, we explore the link between regime type and adoption of unconditional transfers versus transfers conditioned on beneficiaries’ investments in human capital. Due to the direct nature of benefits, unconditional transfers are more likely to be used to buy off opposition and prevent social unrest. As transfers that are conditioned on education and health pay off only in a relatively distant future, they are rarely initiated for political motives and rather defined by interests of long-term development and human capital accumulation. Using the new dataset on Non-Contributory Social Transfer Programs (NSTP) in developing countries, we find that transfers are indeed chosen so as to be unconditional under less democratic regimes. There is some evidence that conditional transfers are more likely to be adopted in democracies. In particular, democracies tend to increase the number of conditional schemes once any social transfer program is introduced.