Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 158: Does Benefit Transfer Always Work: a Multi-country Comparison

Hala Abou-Ali () and Mohammed Belhaj ()
Additional contact information
Hala Abou-Ali: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Mohammed Belhaj: IVL, Postal: Swedish Environmental Research Institute

Abstract: This paper analyzes the welfare effects of a 50 percent reduction in air pollution caused by road traffic in both Cairo (Egypt) and Rabat-Salé (Morocco) using a contingent valuation method with identical elicitation questions. Despite the fact that both the numbers of inhabitants and vehicles are higher in Cairo the willingness to pay to reduce the impacts of vehicle emissions is higher in Rabat-Salé although incomes are rather similar in both cities. This paper shows that the relatively often-used benefit transfer frequently leads to biases where damage costs are under- or overestimated.

Keywords: Air pollution; Benefit transfer; Contingent valuation; Willingness to pay

JEL-codes: C25; Q53

13 pages, January 27, 2005

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