Meta-Functional Benefit Transfer for Wetland Valuation: Making the Most of Small Samples

This study applies functional Benefit Transfer via Meta-Regression Modeling to derive valuation estimates for wetlands in an actual policy setting of proposed groundwater transfers in Eastern Nevada. We illustrate how Bayesian estimation techniques can be used to overcome small sample problems notoriously present in Meta-functional Benefit Transfer. The highlights of our methodology are (i) The hierarchical modeling of heteroskedasticity, (ii) The ability to incorporate additional information via refined priors, and (ii) The derivation of measures of model performance with the corresponding option of model-averaged Benefit Transfer predictions. Our results indicate that economic losses associated with the disappearance of these wetlands can be substantial and that primary valuation studies are warranted. JEL Classification: C11, C15, Q51