No abstract

No abstract

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.

This article is concerned with efficient estimation of characteristics demand. We derive and estimate an inverse input demand system for quality characteristics by using 172,946 observations over 881 trading days in the Icelandic fish auctions. An improved estimation method based on an expanded random coefficient model is suggested as an alternative to the currently used two-stage method of Brown and Rosen. The estimates demonstrate the improved efficiency of the suggested method. A number of empirical results emerge, including a general increase in the demand for quality. Copyright 2004, Oxford University Press.

No abstract