The Economics of Tourism and Sustainable Development

The Economics of Tourism and Sustainable Development

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Alessandro Lanza, Anil Markandya and Francesco Pigliaru

Although economics has increasingly become a technical subject, this accessible book aims to present important economics results and relate them explicitly to the policy debate. Using a coherent analytical framework, this unique approach offers prescriptions for moving tourism, and economic development more generally, closer to a sustainable ideal. The authors begin by studying the macroeconomic effect of tourism in terms of growth performance and sources of growth. They also examine how the tourism–growth link is affected by the role of imports in the economy, and how tourism impacts upon land use. Further chapters investigate the important issue of forecasting visitor numbers and explore the need for a comprehensive accounting framework to take account of ecologically sustainable tourism. The authors also examine the microeconomic aspects of sustainable tourism and analyse the increasing popularity of environmentally friendly holidays.

Chapter 3: Land, environmental externalities and tourism development

Javier Rey-Maquieira Palmer, Javier Lozano Ibáñez and Carlos Mario Gómez Gómez

Subjects: development studies, tourism, economics and finance, environmental economics, environment, environmental economics, tourism, geography, tourism


* Javier Rey-Maquieira Palmer, Javier Lozano Ibáñez and Carlos Mario Gómez Gómez 1. INTRODUCTION Nowadays there is wide consensus that there are limits to a tourism development based on quantitative growth. Obviously, the availability of a fixed amount of land in a tourism resort puts an ultimate limit on its carrying capacity. However, it is reasonable to assume that before the full occupation of land by tourism facilities other limiting factors will operate. Thus the continuous growth in the number of tourists and the associated urban development, especially in small tourism destinations, can give rise to costs in the form of congestion of public goods and loss of cultural, natural and environmental resources. These costs are not only borne by the residents but may also negatively affect the tourism attractiveness of the destination, the willingness to pay for tourism services provided in the tourism resort and thus a fall in the returns to investment in the tourism sector. In this chapter we develop a two-sector dynamic general equilibrium model of a small open economy where tourism development is characterized as a process of reallocation of land in fixed supply from low productivity activities (agriculture, forestry and so on) to its use in the building of tourism facilities. This change in the use of land goes along with investment aimed at the building of accommodation and recreational facilities. Land in the traditional sector, besides being a direct production factor in this sector, contains the cultural, natural and environmental...

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