Tourism Specialization and Sustainability: A Long-Run Policy Analysis

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Tourism Specialization and Sustainability: A Long-Run Policy Analysis SummaryThis study focuses on the dynamic evolution of a small open economy specialized in tourism based on natural resources when tourist services are supplied to foreign tourists who are crowding-averse and give positive value to the environmental quality. We analyse the steady-state properties and run several policy exercises in two versions of our model: in the first, private agents' income is spent entirely on consumption while, in the second, agents are allowed to invest part of their income in pollution abatement technology (PAT) which artificially increases the rate of regeneration of the environmental asset. A unique locally saddle point equilibrium is found in both versions and for both the market and the centralized solution. Our main findings are that: 1) a corrective income tax raises steady state utility in both versions but is capable of leading the economy in its first-best dynamic path only when agents cannot invest in the PAT; 2) when the PAT is available to the government but not to agents, an income tax which finances abatement expenditures may increase steady state utility with respect to the market solution when the natural regeneration rate of the environment and the degree of crowding-aversion are both low enough; 3) when PAT is available, the market chooses to devote a higher fraction of income to abatement than the central planner but in both cases this fraction is positive only if the natural rate of regeneration is not too large; 4) when PAT is available an income pollution tax does not affect the dynamic path of the market economy. Tourism specialization and sustainability: a long-run policy analysis Keywords Fabio Cerina CRENoS and University of CagliariAbstract This study focuses on the dynamic evolution of a small open economy specialized in tourism based on natural resources when tourist services are supplied to foreign tourists who are crowding-averse and give positive value to the environmental quality. We analyse the steady-state properties and run several policy exercises in two versions of our model: in the …rst, private agents' income is spent entirely on consumption while, in the second, agents are allowed to invest part of their income in pollution abatement technology (PAT) which arti…cially increases the rate of regeneration of the environmental asset. A unique locally saddle point equilibrium is found in both version...

Tourism Specialization and Environmental Sustainability in a Dynamic Economy

“…On the other hand, the model takes into account also the case of an economy which fails to employ its environmental amenities for tourism purposes and then its dynamic evolution ends up (within a …nite time) with a perfectly virgin environment (E = E) but with no tourists at all and, therefore, with no consumption. Finally, it is worth re ‡ecting on the e¤ect that (exogenous) growth might have on the variables C; N and E: As already said, exogenous growth is introduced in this model by assuming that t = 0 e gt (where g 0 is the rate of growth of the WTP) and can be thought as the result of continual gains in the terms of trade 9 . By (13) and (14) we note that both tourist in ‡ows N and the environmental quality E are not a¤ected by t so that they remain constant in steady state even if exogenous growth is introduced.…”

“…Corrective policy The policy needed induce people to replicate the optimal dynamic system described by (9) and (10) is identical to the previous case: local authorities can tax income and then simply redistribute the tax gains with expost lump-sum transfers. The resulting dynamic system for the whole economy is now given by…”

Uncovering the Macrostructure of Tourists' Preferences: A Choice Experiment Analysis of Tourism Demand to Sardinia

“…However, several theoretical studies (e.g. Lanza and Pigliaru, 1994;ReyMaquieira, Lozano and Gómez, 2005;Cerina, 2005) have pointed out that these negative effects can be outweighed through a cautionary management of natural resources, not only in ensuring the long-run exploitation of resources, but also in increasing tourist willingness to pay, and ultimately tourism receipts.…”

Tourism, Growth and Pollution Abatement

“…This chapter investigates the environmental consequences of their main results and offers an alternative (and out-ofequilibrium) explanation for such a positive performance. Among this strand we also include Gomez Gomez et al (2004), Giannoni and Maupertuis (2005), Lozano et al (2005), Rey-Maquieira et al (2005), Cerina (2006Cerina ( , 2007 and Candela and Cellini (2006). Explicitly dealing with environmental issues, the aims of this group of works are similar to ours though crucial differences in the modelling strategies and in the level of investigation exist.…”