International Tourism: Its Costs and Benefits to Host Countries

Chao, Chur Chi; Sgro, Pasquale M.

doi:10.1142/9789814327084_0026

Cited by 2 publications

(1 citation statement)

References 7 publications

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“…18 Beladi et al (2009) and Chao et al (2008) assume a multiplicative utility function Chao et al (2012) and Chao and Sgro (2013) adopt an additively separable utility function…”

Section: The Effects On the Tourism Terms Of Trade And Welfarementioning

confidence: 99%

Tourism infrastructure and the environment: how does environmental regulation affect welfare, tourism industry, and domestic wage inequality?

Shimizu

Okamoto

2022

JER

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This study presents a general equilibrium model of a small open developing economy with pollution generated by the tourism industry. The national government issues emission permits and constructs tourism infrastructure for the tourism sector. We examine the effects of a stricter environmental regulation on welfare, production, and income distribution. If the elasticity of substitution in the tourism sector is sufficiently low, a stricter environmental regulation paradoxically expands the tourism sector and narrows domestic wage inequality, even under constant tourism terms of trade. In this model, in addition to the two traditional channels, there is a new channel through which a stricter environmental regulation affects the tourism terms of trade and domestic welfare. The new channel, which arises from the difference between the marginal value product of tourism infrastructure and its price, improves the tourism terms of trade and domestic welfare if (1) the marginal value product of tourism infrastructure is greater than its price, (2) the output of tourism infrastructure is increased by a stricter environmental regulation, and (3) the excess supply of a tourism service decreases with a stricter environmental regulation.

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“…18 Beladi et al (2009) and Chao et al (2008) assume a multiplicative utility function Chao et al (2012) and Chao and Sgro (2013) adopt an additively separable utility function…”

Section: The Effects On the Tourism Terms Of Trade And Welfarementioning

confidence: 99%