Tourism, Amenities, and Welfare in an Urban Setting

Abstract

Using data on Italian cities, we document that, over the period 2001-2011, the number of establishments and employment in some key service industries are positively related to the inflow of tourists. We then build a general equilibrium model of small open cities to study the impact of tourism on endogenous amenities, factors' allocation across sectors, prices, and welfare. Tourism has two main effects on the urban economy: first, consistently with the observed pattern in the data, it increases the number of firms (an endogenous consumption amenity) and employment in the non-tradable sector; second, it increases prices. In the model tourism may hurt the resident population: with unequal land endowments, poorer residents are hurt by tourism because the rise in city prices offsets the positive impact on the urban consumption amenity. Along with several other extensions to the baseline model, we study the interplay of historical (exogenous) amenities, tourism and residents welfare in a system of two cities.

The attractiveness of a post-mining city as a tourist destination from the perspective of visitors: a study of Sawahlunto old coal mining town in Indonesia

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The attraction of urban cores: Densification in Dutch city centres

“…The importance of high-income individuals and relatively young couples without children who are willing to pay a premium for small but well-located apartments in city centres is evidenced in recent housing market research (Bartholomae et al, 2016;Kodrzycki and Mun˜oz, 2015) and residential preferences studies (Ogden and Hall, 2000;Thomas et al, 2015). Recent research about the economic development of historical cities emphasises the synergy between the quality of historical heritage and the development of urban amenities nearby (Lanzara and Minerva, 2018;Wang et al, 2019). Some of the studied cities also receive large numbers of tourists through home-sharing initiatives such as Airbnb that are thought to displace residents as they limit the supply of affordable housing (Ferreri and Sanyal, 2018).…”