Benefit transfers: are they a satisfactory input to benefit cost analysis? An airport noise nuisance case study

Benefit cost analysis in a variety of guises has established itself as a useful tool in public policy-making. It is an approach widely adopted in appraising a wide range of infrastructure investments and has been regularly used in legal proceedings. In the context of this study, it forms a common procedure for assisting in the assessment of the social benefits and costs of airport investment. It is not, however, a technique without its limitations. Beside a range of technical concerns, conducting a comprehensive benefit cost analysis can be resource-intensive and time-consuming. Recently, there have been efforts to make its application more efficient by adopting benefit transfer procedures. This involves making use of findings from one study as inputs into other policy-making activities. While applying secondary data to a new policy issue has a long pedigree, new areas of application involve taking non-market valuations of externalities from one study and transferring them to a different policy site. This paper looks at some of the limitations of employing benefit transfers and uses noise nuisance aspect of airport investment policy appraisal as an illustrative case. Based upon a meta-regression assessment of hedonic price models, the findings suggest that caution should be exercised in conduction benefit transfers.