We develop and test guidance principles for benefits transfers. These argue that when

transferring across relatively similar sites, simple mean value transfers are to be preferred

but that when sites are relatively dissimilar then value function transfers will yield lower

errors. The paper also provides guidance on the appropriate specification of transferable

value functions arguing that these should be developed from theoretical rather than ad-hoc

statistical principles. These principles are tested via a common format valuation study of

water quality improvements across five countries. Results support our various hypotheses

providing a set of principles for future transfer studies. The application also considers new

ways of incorporating distance decay, substitution and framing effects within transfers and

presents a novel water quality ladder.