137
there are a lot of unobserved possibilities that never got chosen because the prices
did not favor them. This means, for example, if the ratio of say natural gas generated
electricity to coal prices has been in one interval that we would not have seen strategies appearing that used much more natural gas in electricity generation which
would only happen if much lower relative prices appeared.
However, Nexus actions or external forces can alter production possibilities, isoquants, and relative prices. Under such shifts, previously unattractive Nexus related
production or resource usage strategies can become desirable. Thus, not all possible
strategies will be observed and thus new never before seen strategies may arise.
As a consequence, identifying Nexus related strategies through surveys, interviews or other means will not generally describe the full set of possible strategies
that may arise in the future.
5.2.7 Can I Transfer Results from Other Assessments
into This One?
As discussed in Sect. 5.2.6 (Economic influences on observed nexus strategies),
there exists prior actions that address the Nexus either in the target region or similar
region. Frequently, results from other studies are used in a Nexus evaluation rather
that developing primary estimates. A big issue in such a setting raises what economists called “benefits transfer” which refers to the transfer of benefit estimates
from some other location into the differing project location. For example, Hansen
and Ribaudo (2008) provide dollar-per-ton estimates for 14 categories of soil conservation projects while Young and Loomis (2014) contain an estimate of the value
of water from various regions. However, using such numbers needs to be done with
caution. Brouwer (2000) argues that most transfers appear to result in substantial
transfer errors.
In covering benefits transfer, the Ecosystem Valuation website developed by
King and Mazzotta (2000) states “The more similar the sites and the recreational
experiences, the fewer biases will result” and then presents a discussion and cites
the benefits of such an action as:
1. Reductions in the cost of carrying out an appraisal;
2. Speed of attaining the information;
3. Ability to use the transferred estimate in constructing a rough estimate of the
value of a project to see if more effort on it is justified; and
4. Ability to use in making a gross estimate of the total item value (i.e., cost of
water or reduced erosion).
It also cites the limitations as:
1. The transfer may not be accurate, except for gross estimates unless the sites
share all characteristics;
2. Good estimates for the item at hand may not be available;
5 Economics
there are a lot of unobserved possibilities that never got chosen because the prices
did not favor them. This means, for example, if the ratio of say natural gas generated
electricity to coal prices has been in one interval that we would not have seen strategies appearing that used much more natural gas in electricity generation which
would only happen if much lower relative prices appeared.
However, Nexus actions or external forces can alter production possibilities, isoquants, and relative prices. Under such shifts, previously unattractive Nexus related
production or resource usage strategies can become desirable. Thus, not all possible
strategies will be observed and thus new never before seen strategies may arise.
As a consequence, identifying Nexus related strategies through surveys, interviews or other means will not generally describe the full set of possible strategies
that may arise in the future.
5.2.7 Can I Transfer Results from Other Assessments
into This One?
As discussed in Sect. 5.2.6 (Economic influences on observed nexus strategies),
there exists prior actions that address the Nexus either in the target region or similar
region. Frequently, results from other studies are used in a Nexus evaluation rather
that developing primary estimates. A big issue in such a setting raises what economists called “benefits transfer” which refers to the transfer of benefit estimates
from some other location into the differing project location. For example, Hansen
and Ribaudo (2008) provide dollar-per-ton estimates for 14 categories of soil conservation projects while Young and Loomis (2014) contain an estimate of the value
of water from various regions. However, using such numbers needs to be done with
caution. Brouwer (2000) argues that most transfers appear to result in substantial
transfer errors.
In covering benefits transfer, the Ecosystem Valuation website developed by
King and Mazzotta (2000) states “The more similar the sites and the recreational
experiences, the fewer biases will result” and then presents a discussion and cites
the benefits of such an action as:
1. Reductions in the cost of carrying out an appraisal;
2. Speed of attaining the information;
3. Ability to use the transferred estimate in constructing a rough estimate of the
value of a project to see if more effort on it is justified; and
4. Ability to use in making a gross estimate of the total item value (i.e., cost of
water or reduced erosion).
It also cites the limitations as:
1. The transfer may not be accurate, except for gross estimates unless the sites
share all characteristics;
2. Good estimates for the item at hand may not be available;
5 Economics