nep-tur New Economics Papers
on Tourism Economics
Issue of 2006‒04‒29
nine papers chosen by
Antonello Scorcu
Universita di Bologna

  1. Taxing Tourism in Spain: Results and Recommendations By Xavier Labandeira; Alberto Gago; Fidel Picos; Miguel Rodríguez
  2. Uncovering the Macrostructure of Tourists’ Preferences. A Choice Experiment Analysis of Tourism Demand to Sardinia By Rinaldo Brau; Davide Cao
  3. Effects of Great Barrier Reef Degradation on Recreational Demand: A Contingent Behaviour Approach By Peter C. Roebeling; M.E. Kragt; A. Ruijs
  4. Testing Alternative Dynamic Systems for Modelling Tourism Demand By Maria M. De Mello; Natércia Fortuna
  5. The Economics of Casino Taxation By Hasret Benar; Glenn P. Jenkins
  6. Network Analysis, Creative System Modelling and Decision Support: The NetSyMoD Approach By Carlo Giupponi; R. Camera; A. Fassio; A. Lasut; J. Mysiak; A. Sgobbi
  7. Regulation and Taxation of Casinos under State-Monopoly, Private Monopoly and Casino Association Regimes By Hasret Benar; Glenn P. Jenkins
  8. Using Discrete Choice Experiments to Derive Individual-Specific WTP Estimates for Landscape Improvements under Agri-Environmental Schemes: Evidence from the Rural Environment Protection Scheme in Ireland By Danny Campbell; W. George Hutchinson; Riccardo Scarpa
  9. Keeping in Touch: A Benefit of Public Holidays By Joachim Merz; Lars Osberg

  1. By: Xavier Labandeira (University of Vigo); Alberto Gago (University of Vigo); Fidel Picos (University of Vigo); Miguel Rodríguez (University of Vigo)
    Abstract: This paper analyses the foundations, possible applications and the effects of tourism taxation in Spain. The article begins with an analysis of the economic and environmental reasons for taxing tourism, which would seem to call for taxes based on the principle of benefit, for either revenue or corrective purposes. Subsequently, we describe the praxis of tourism taxation in Spain, with special mention being given to the now repealed Balearic ecotasa. Finally, the effects of two fiscal modifications with revenue or corrective objectives are studied through the use of an applied general equilibrium model developed for the Spanish economy. We thus see that a 10% tax on lodging brings in significant public receipts, increases social welfare and has no effect on the environment. On the other hand, an increase of VAT rates on tourism-related sectors could have the same effects on tourist expenditure but at the costs of greater impact for Spain’s economy.
    Keywords: Taxes, Tourism, Environment, Spain
    JEL: H22 L83 Q28
    Date: 2006–02
  2. By: Rinaldo Brau (University of Cagliari); Davide Cao (CRENoS)
    Abstract: This paper studies the preferences of tourists visiting the island of Sardinia (Italy), by means of a choice modelling approach. The focus is on some specific demand-enhancing effects which should confirm the feasibility of implementing sustainable tourism policies. Multinomial logit estimations reveal the strong negative effects resulting from the congestion of tourist attractions and the major transformation of coastal environments. On the other hand, recreational services and the proximity of accommodation to the beaches also seem to be important. The computation of willingness to pay measures and choice probabilities for hypothetical destinations illustrate how this kind of approach can provide useful information in determining decision processes by policy makers and development agencies.
    Keywords: Tourism demand, Green preferences, Choice experiments, Stated preferences
    JEL: Q56 L83 C25
    Date: 2006–02
  3. By: Peter C. Roebeling (CSIRO Sustainable Ecosystems); M.E. Kragt (University and Research Centre); A. Ruijs (University and Research Centre)
    Abstract: Degradation of coral reefs may affect the number of tourists visiting the reef and, consequently, the economic sectors that rely on healthy reefs for their income generation. A Contingent Behaviour approach is used to estimate the effect of reef degradation on demand for recreational dive and snorkel trips, for a case study of the Great Barrier Reef (GBR) in Australia. We assessed how reef degradation affects GBR tourism and to what extent reef-trip demand depends on the visitors’ socio-economic characteristics. A count data model is developed, and results indicate that an average visitor would undertake about 60% less reef trips per year given a combined 80%, 30% and 70% decrease in coral cover, coral diversity and fish diversity, respectively. This corresponds to a decrease in tourism expenditure for reef trips to the Great Barrier Reef Marine Park of about A$ 136 million per year.
    Keywords: Coral Reef, Recreation, Contingent Behaviour Model, Count Data Models
    JEL: Q25 Q26 Q51
    Date: 2006–03
  4. By: Maria M. De Mello (CETE, Faculdade de Economia, Universidade do Porto); Natércia Fortuna (CEMPRE, Faculdade de Economia, Universidade do Porto)
    Abstract: The goals in this paper are to contribute an empirical study of tourism demand dynamics, and to point out areas where the scrutiny of relationships between theoretical and empirical considerations are likely to produce new insights in this area of research. A flexible general form of a Dynamic Almost Ideal Demand System (DAIDS) is derived to analyse the UK tourism demand for its geographically proximate neighbours Portugal, Spain and France, in the period 1969-1997. Nested within the general dynamic structure are Deaton and Muellbauer’s static AIDS model itself, the partial adjustment model and the auto-regressive distributed lag model, which are tested against the general dynamic alternative. The empirical results obtained show that DAIDS is a data coherent and theoretically consistent model, providing evidence of the robustness of this methodology to conduct tourism demand analysis in a temporal context. Moreover, the dynamic model offers statistically strong evidence on the inadequacy of the orthodox static AIDS and the other restricted models to reconcile consistently data and theory within their formulations. Estimates for tourism price and expenditure elasticities are obtained, permitting a comparative analysis of the relative magnitudes and statistical relevance of long and short run sensitivity of the UK tourism demand to changes in its determinants.
    Keywords: Tourism Demand, dynamic almost ideal system, partial adjustment system, autoregressive distributed lag system.
    JEL: C52 D12
    Date: 2005–02
  5. By: Hasret Benar (Department of Economics, Eastern Mediterranean University); Glenn P. Jenkins (Department of Economics, Queen's University)
    Abstract: In this paper, a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos. The situation being considered is in a country where casinos cater exclusively to foreign tourists. The goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation. When the price of gambling is set by regulation above its competitive level, the economic losses created by excessive investment in the sector can be reduced by taxation. A turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country. Due administrative constraints, a number of countries rely on the taxation of the casinos’ fixed assets or a combination of a turnover tax and a tax on fixed costs. The model is applied to the situation in North Cyprus. The annual economic efficiency loss from its poorly designed tax policies on casino gambling is estimated to be about 0.5 percent of GDP.
    Keywords: Casino, taxation, gambling, tourism, economic benefit
    JEL: H21 H32 H27
    Date: 2006–04
  6. By: Carlo Giupponi (Universita' degli Studi di Milano); R. Camera (Fondazione Eni Enrico Mattei); A. Fassio (Fondazione Eni Enrico Mattei); A. Lasut (Fondazione Eni Enrico Mattei); J. Mysiak (Fondazione Eni Enrico Mattei); A. Sgobbi (Fondazione Eni Enrico Mattei)
    Abstract: This paper presents the NetSyMoD approach – where NetSyMod stands for Network Analysis – Creative System Modelling – Decision Support. It represents the outcome of several years of research at FEEM in the field of natural resources management, environmental evaluation and decision-making, within the Natural Resources Management Research Programme. NetSyMoD is a flexible and comprehensive methodological framework, which uses a suite of support tools, aimed at facilitating the involvement of stakeholders or experts in decision-making processes. The main phases envisaged for the process are: (i) the identification of relevant actors, (ii) the analysis of social networks, (iii) the creative system modelling and modelling of the reality being considered (i.e. the local socio-economic and environmental system), and (iv) the analysis of alternative options available for the management of the specific case (e.g. alternative projects, plans, strategies). The strategies for participation are necessarily context-dependent, and thus not all the NetSyMod phases may be needed in every application. Furthermore, the practical solutions for their implementation may significantly differ from one case to another, depending not only on the context, but also on the available resources (human and financial). The various applications of NetSyMoD have nonetheless in common the same approach for problem analysis and communication within a group of actors, based upon the use of creative thinking techniques, the formalisation of human-environment relationships through the DPSIR framework, and the use of multi-criteria analysis through the mDSS software.
    Keywords: Social Network, Integrated Analysis, Participatory Modelling, Decision Support
    JEL: Q01 Q25 Q28 Q5
    Date: 2006–03
  7. By: Hasret Benar (Department of Economics, Eastern Mediterranean University); Glenn P. Jenkins (Department of Economics, Queen's University)
    Abstract: This paper considers alternative forms of regulation and taxation of the casino sector. The model considers the situation of a typical tourist destination country that is using casinos to attract and entertain foreign tourists. The objective is to invest in the sector efficiently while maximizing the amount of government revenue or profits accruing to the country. The regulator must determine how the price of gambling will be set, how many casinos will be allowed to enter the industry and the form and rates of taxation. Four alternative forms of regulation are considered: price regulation, state-owned monopoly, private monopoly and casino association regulation. Turnover taxes on the amount of funds gambled and also annual taxation of the fixed costs of the casinos are evaluated. Applications of the models are carried out for North Cyprus. The conclusion is that the economic efficiency costs and the revenue losses from the absence of effective regulation in these tourist destinations can be very substantial with welfare costs equal to the approximately 75 percent of the tax revenue generated by this sector. Furthermore it shows that while a tax on turnover can be efficient in the case of a competitive industry or a cartel association form of regulation, it will be distortunary if a private monopoly is controlling the sector. In contrast a tax on fixed costs will lead to an efficient result in the case of a competitive or private monopoly cases, but it will lead to allocate inefficiencies if the sector is regulated by a casino association that can only control the number of casino entering the sector.
    Keywords: Casino regulation, taxation, state-monopoly, welfare cost
    JEL: H21 H32
    Date: 2006–04
  8. By: Danny Campbell (Queen’s University Belfast); W. George Hutchinson (Queen’s University Belfast); Riccardo Scarpa (University of Waikato and University of York)
    Abstract: Reported in this paper are the findings from two discrete choice experiments that were carried out to address the value of a number of farm landscape improvement measures within the Rural Environment Protection (REP) Scheme in Ireland. Image manipulation software is used to prepare photorealistic simulations representing the landscape attributes across three levels to accurately represent what is achievable within the Scheme. Using a mixed logit specification willingness to pay (WTP) distributions based on the parameter estimates obtained from the individual conditional distributions are derived. These estimates are subsequently adjusted and combined to account for baselines and levels of improvement resulting from the implementation of the REP Scheme. Individual-specific WTP estimates are thus obtained for the contribution of the Scheme to rural landscapes and are subsequently contrasted with the average cost of the Scheme across the Irish adult population. Results indicate that the Scheme contributes substantial benefits to rural landscapes.
    Keywords: Agri-environment, Discrete choice experiments, Individual-specific WTP, Mixed logit
    JEL: Q51 Q24
    Date: 2006–02
  9. By: Joachim Merz (University of Lueneburg and IZA Bonn); Lars Osberg (Dalhousie University)
    Abstract: This paper argues that public holidays facilitate the co-ordination of leisure time but do not constrain the annual amount of leisure. Public holidays therefore have benefits both in the utility of leisure on holidays and (by enabling people to maintain social contacts more easily) in increasing the utility of leisure on normal weekdays and weekends. The paper uses the variation (13 to 17) in public holidays across German Länder and the German Time Use Survey of 2001-02 to show that public holidays have beneficial impacts on social life on normal weekdays and weekends. Since these benefits are additional to the other benefits of holidays, it suggests that there is a case to be made for more public holidays.
    Keywords: public holidays, social contacts, social leisure time, time allocation, time use diaries, German Time Budget Survey 2001/02
    JEL: J22 I31 Z13 H40
    Date: 2006–04

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