The Realities of using 'Benefit Transfers' in Transport Decision-Making

There is an increasing demand for transport decisions to be made in the light of some form of what may generically be called cost benefit analysis (CBA). The actual techniques may vary and often deviate quite significantly from the conventional economic concept of CBA but in all cases the procedures tend to be information intensive. In some cases there is a statutory requirement that standardized parameters are used, but often specific studies are performed. In these latter cases the studies are lengthy and generally financially costly. To reduce these problems there has been an increasing advocacy of 'benefit transfers' being deployed. This involves taking parameters such as elasticities or valuations of externalities from one study and applying them to another. This paper explores the validity of the benefit transfer approach from both a theoretical and an empirical perspective. In particular, it examines the extent to which it is legitimate to transfer parameters from one case and apply them to another and to isolate the conditions under which such transfers may sensibly be made.