How Reliable are Expert Predictions of Households’ Willingness-to-Pay to Preserve the Amazon Rainforest? Comparing Contingent Valuation, Delphi Surveys and Benefit Transfer

Ståle Navrud

How Reliable are Expert Predictions of Households’ Willingness-to-Pay to Preserve the Amazon Rainforest?
Comparing Contingent Valuation, Delphi Surveys and Benefit Transfer

Abstract

Avoiding deforestation of the Amazon rainforest and the resulting loss of biodiversity and ecosystem services provide benefits to both local households and households worldwide. The latter benefits seem to account for the majority of the total global benefits. As it is very time consuming and costly to assess these global non-use values in stated preference (SP) surveys in all countries worldwide, benefit transfer (BT) exercises and expert assessment in Delphi Contingent Valuation (CV) surveys have been conducted.

We test the reliability of these two approaches for predicting distant beneficiaries´ willingness-to-pay (WTP) for Amazon Rainforest preservation plans by comparing these estimates to a new CV survey of 300 Norwegian households. The survey found a mean WTP of 110 € (NOK 1100) per household per year to avoid further forest and biodiversity loss.

Whereas BT in terms of unit transfer with income adjustment from a North American SP survey of similar preservation plans, resulted in transfer errors of 43-131 %; the Norwegian experts in the Delphi CV survey predicted the outcome of the population CV survey with transfer errors ranging from 2 to 31 %. Thus, the Delphi CV method could be a valid, as well as very time and cost effective, technique for assessing benefits of global public goods to distant beneficiaries.