nep-tur New Economics Papers
on Tourism Economics
Issue of 2006‒06‒03
seven papers chosen by
Antonello Scorcu
Universita di Bologna

  1. The tourism as a development investment in less developed regions: network behaviour of different cities By Hale Ciraci; Kenan Gocer; Ebru Kerimoglu
  2. Public Preferences for Land uses’ changes - valuing urban regeneration projects at the Venice Arsenale By Patrizia Riganti; Anna Alberini; Alberto Longo
  3. Valuing cultural heritage benefits to urban and regional development By Patrizia Riganti; Peter Nijkamp
  4. Assessing management options for weed control with demanders and non-demanders in a choice experiment By Carlsson, Fredrik; Kataria, Mitesh
  5. New Ways through the Alps The New Gotthard Base Tunnel - Impact of a Big Construction Site on a Small Mountain Village By Simone Strauf; Manfred Walser
  6. Can the European low-cost airline boom continue?: Implications for regional airports By Nigel Peter Stewart Dennis
  7. Modelling departure time and mode choice By Andrew Daly; Stephane Hess; Geoff Hyman; John Polak; Charlene Rohr

  1. By: Hale Ciraci; Kenan Gocer; Ebru Kerimoglu
    Abstract: Tourism industry has been used to create new employment opportunities by increasing the business capacity and to provide economic growth in Turkey. But most of the tourism investments have been located in relatively more developed western and southern regions, which are ecologically sensitive coastal areas. It is known that there are important disparities between socio-economic development levels of different regions and tourism industry can be a planning investment in revitalizing the less developed areas. Turkey is a very large country, it has very much climatic regions and natural resources and as it is a place of meeting of many cultures and religions throughout the history, it owns a very rich cultural and archaeological inheritance. In this framework, it is possible to make tourism investments in such fields as urban tourism, sea-sun tourism, winter tourism or religion based tourism. The urban tourism that is able to attract tourists in any season has a very widespread potential in the country and provides us with substantial opportunities for the provinces with only one tourism option such as winter tourism. From 1980s so far, there has been discrete developments thanks to efforts of local governments, the association of tourism investors and the Ministry of Tourism. The Law for Tourism Encouragement enforced in 1982 defined the terms ‘tourism region’, ‘tourism area’ or ‘tourism center’ and provided such concepts with a legal definition and determined the systems of encouragement and means of application in these fields. In establishing these regions, areas and centers, the country has been taken as a whole with its natural, historical, archaeological, socio-cultural and tourism values as well as winter, hunting and water sports, health tourism and religion based tourism potential. But a means to create network by combining different types of tourism and creating a synergy in tourism sector by means of cooperation between the cities has not been followed so far. Combining these different types of tourism and providing cooperation between cities will create a synergy in tourism sector in less developed areas. This study tries to answer the question of which cities can be grouped as a network to cooperate based on tourism industry regarding their tourism potential. In this study using cluster analysis and factor analysis cities are grouped according to their socio-economic development levels. The results of cluster analysis indicate that western-southern, middle-northern, and eastern-southern regions are three major development levels. According to the factor analysis, the provinces grouped in 4 different levels of development in relation to different factors. These spatial settings in Turkey’s geography show as to which regions would respond the investments to be made in a shorter period. As the country is very large, the attractive points with a high tourism potential, other than those in the developed regions should be determined and a synergy between the settlement zones should be established in an effort to increase the productivity. It would be possible to coordinate the infrastructure investments to take place in the cities and to define the short, medium and long-term investments with this study.
    Date: 2004–08
  2. By: Patrizia Riganti; Anna Alberini; Alberto Longo
    Abstract: This paper discusses the results of a conjoint analysis study developed to assess alternative land uses for an important part of the city of Venice: its Arsenal. Aim of the study is to illustrate the potential of stated preferences techniques for placing a value on redevelopment and reuse alternatives for an underutilized site with high historical, cultural and architectural significance. Very few studies have used conjoint choice to assess public preferences for alternative land uses in an ex-ante framework, i.e. masterplans. For our study, we wanted to concentrate on a “city of art,” where the relationship between cultural heritage resources management and city development is more critical. Venice was an obvious choice for the national and international relevance of its heritage. The Arsenale is one of the few places in Venice that has the potential for a real transformation of its uses, with important impacts on both residents and visitors. Moreover, the Arsenale plays a strong symbolic role: it was the place where the strength and power of the Serenissima was built. The City Council of Venice has recently deliberated that the Arsenale is an inalienable heritage of the city of Venice. In recent years, the importance of the Arsenale has resulted in a heated debate on its possible new uses. Many architectural proposals have been submitted through international competitions. These proposals—whether submitted in the past or currently under consideration—have shown that there may be a conflict between different possible land uses and the transformation allowed by the existing architectural structures. We surveyed individuals in Venice asking respondents to engage in conjoint choice tasks, gathering 168 usable observations. Members of the general public were intercepted at the Multimedia Library at Palazzo Querini Stampalia/FEEM and asked to indicate which choice they preferrd among hypothetical—but realistic—redevelopment projects of the Arsenale historic site. Each project was described by a vector of attributes, such as land use, use of basins and waterways, architectural features, access, employment implied by the reuse, and cost. The responses to these choice tasks was used to infer the rate at which respondents trade off land uses, aesthetic features, and costs, and hence to derive the value of marginal changes in the attributes, and the value of a proposed policy package. The Venice Arsenale is owned by the Italian government and is currently used by the Italian Navy. The Arsenale site accounts for about 15 percent of the area of the city of Venice (about 45 hectares), and is located in the Castello district. Tradition has it that doge Ordefalo Falier founded the Arsenale—a shipbuilding yard—in 1104. In 1340 the “Darsena Nuova” was created, which marked the birth of the Arsenal Nuovo and of the Corderie building. Further expansion started in 1473, covering an area of 26 hectares. This phase lasted more than 100 years, resulting in the construction of the New Corderie building, among others, in 1591. In its heyday, the Arsenale employed roughly 20,000 workers in an assembly-line fashion and produced one ship a day. The Arsenale, after the navy largely withdrew from the complex over 40 years ago, suffered from abandonment and under use. The Arsenale is, therefore, one of the few places in Venice that has the potential for a real transformation of its uses. In this paper we investigate how the development of the Arsenale site, involving alternative land uses, may influence the welfare of the residents of the historical city center of Venice. Starting from the evidence of our survey in Venice, the paper broaden its scope to discuss ways of improving the management of cultural heritage cities, focusing on new forms of involvement and public participation based on public preferences’ elicitation. We debate the issues related to city governance and the need for an appropriate level of democratic participation. An integrated approach, capable of bridging the practice of economic valuation, urban design, conservation of the built environment, and decision-making support systems is here analysed.
    Date: 2005–08
  3. By: Patrizia Riganti; Peter Nijkamp
    Abstract: This paper discusses the role that cultural heritage has in shaping social capital in contemporary cities, and the available valuation methodologies capable of measuring its impacts on cities’ economic growth. First, the economic nature of cultural goods and the role played by their valuation in regional planning is discussed. Then a critical review of the current available valuation methodologies is presented. Finally, the potential of meta-analysis is debated. Cultural heritage represents the record of mankind achievements and relationships with the world. Therefore, it has always a local dimension, though sometimes it embeds universally shared values. The concept of heritage is not given, but created by a community, by people who attach values to some objects, rites, languages, contexts, lifestyles, historic sites and monumental buildings. Labelling something as heritage represents a value judgment, which distinguishes that particular object from others, adding new meaning to it. Cultural heritage summarises people’s identities, shapes communities’ ones, and to this extent contributes to the creation of social capital. Heritage is a social, economic, and cultural resource. Heritage valuation becomes a tool to better understand the significance of heritage to different sections of society. The valuation process aims to assess existing values as attached by the relevant population. However, the ultimate aim in the context of policy analysis is to value in order to achieve the valorisation of our heritage, in order words, to add new values to the existing ones. Therefore, valuation represents a crucial step in the management of cultural heritage and in regional development. Cultural heritage ownership rests with society which may also decide on the access conditions; in principle, no citizen can be excluded from its use. Clearly, the specific nature of cultural heritage as a collective good also implies that the investment and maintenance costs have to be covered by all citizens. Free ridership is not a meaningful option under such circumstances, so that usually taxation schemes – sometimes accompanied by private transaction schemes (such as entry tickets) or even subsidisation schemes – are put in place to ensure financial viability of maintaining the stock of cultural heritage. Consequently, valuation issues of cultural heritage deserve a prominent place in the socio-economic analysis of these assets. Cultural heritage has another feature which gives it a specific characteristic: it is usually unique in nature and hence not substitutable. Consequently, the social value of cultural heritage cannot be assessed by means of normal market transactions, as the usual conditions for market transactions are lacking. In conclusion, the evaluation of cultural heritage is fraught with many complex problems of both an economic and socio-cultural nature. There is not an unambiguous approach that has a universal validity. Rather, there are classes of assessment and evaluation methods that may be helpful in specific cases. . In the history of evaluation a wide variety of different methods has been developed, such as social cost-benefit analysis, planning balance sheet analysis, community impact assessment, multicriteria analysis, participatory group decision analysis, shadow project evaluation, and so forth. There is not a single best method, as the valuation of non-traded goods cannot be solved in a straightforward manner. The present paper aims to offer a concise introduction to the problems at hand and to discuss various classes of evaluation techniques that have been developed and employed in the past years. Despite the appreciation of the role played by cultural heritage in the development of the city, research efforts have not been sufficiently integrated to tackle the complex issues related to its conservation and the need to develop comprehensive approaches and methodologies for its management. Valuation methods play a strategic role in this context. They represent an essential tool to assess the value of urban heritage per se, the potential economic benefits of its transformation, the damage caused to it by environmental hazards, and the benefits of alternative management options for its exploitation. However, evaluation of cultural heritage cannot be based on generic assessment techniques, but has to be performed by tailor-made methods that address the specifications of cultural assets. This paper discusses a way forward.
    Date: 2004–08
  4. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: The yellow floating heart is a water weed causing nuisance problems in Swedish watercourses. An economic analysis of this is required where various management options are considered. The benefits of a management program are to a large extent recreational. Using a choice experiment we estimate the benefits of a weed management program and perform a cost-benefit analysis of different management programs. In order to be able to distinguish between those who have a demand for a program from those who do not, we introduce a way to distinguish demanders from non-demanders in the choice experiments. The advantage of our suggested approach is that we can more clearly distinguish between conditional and unconditional willingness to pay. In the empirical study we find that a share of the respondents are non-demanders. The demander willingness to pay still justifies cutting the weed in certain places in the lake, given that we use a simple cost-benefit rule. <p>
    Keywords: Choice experiments; invasive species; non-demanders; bivariate probit
    JEL: Q25 Q26 Q51
    Date: 2006–05–30
  5. By: Simone Strauf; Manfred Walser
    Abstract: For Switzerland as located in the heart of Europe transport policy is a matter of particular importance. Especially transports between Italy and Germany use the Swiss corridors through the Alps. Therefore Switzerland realised a most ambitious construction project called NEAT (Neue Alpen Transversale) to improve the European train connections especially for freight transports. One part of the project is the new Gotthard base tunnel, the longest railway tunnel of the world and the most impressive element of the new transalpine railway line through the Alps. In view of the difficult accessibility and extreme climatic conditions, ensuring the fast and reliable transit of more than 300 trains per day through the two 57 km long single-track galleries represents a considerable technical challenge. The Gotthard base line directly links the northern and southern sides of the Alps and the project of building a new line should achieve the following goals: Massive increase in goods capacity (twice as much as today) Much shorter North-South transit time for passengers and freight Reduced traction power requirements, per weight unit of transported goods, as a result of the elimination of steep slopes. The construction work started in 1996 and will be probably finished by 2013. Because of the length of the tunnel five points were chosen, from which the drilling started. The shortest but technical most challenging phase of construction is located under the small village of “Sedrun” in the canton of “Graubünden”. Sedrun is a tourism destination for skiing, 1335 m above sea level with about 1.500 inhabitants. Here a gallery leads to a mine shaft with a depth of 800 m, ending at 550 m above sea level. At the intermediate access of Sedrun a multifunctional station is located which also is used for crossover, air ventilation, technical infrastructure and in case of emergency. The construction site with its enormous needs on resources, infrastructure, workforces - for example at the beginning a lot of specialists from South African mining branch came to Sedrun – may be a big challenge for the small village. In 2004 during the peak period up to 400 workers have been employed. Also logistical solutions for the transport of machines and material to the construction side and the carrying of stone to the deposits have to be developed. An ongoing long-term accompanying research (2000 – 2013) is analysing the ecological, economic and social impact on the construction site for the village and the region. The research project wants to assess the sustainability of such a long-term construction process. The contracting body is an advisory group of public institutions including the community of Sedrun, the region ‘Obere Surselva’, the canton Graubünden and the Swiss Federal Office of Transport. Within the long-term research a set of indicators will be collected every year furthermore an every third year deep-rooted analysis on different topics will be done. The project also has the function of an early-warning system to anticipate unexpected stresses and strains. The results of the research will be visualised from a documentary film team. Besides the annual research we tried to answer the following question: Which are the economic impacts of the construction site for the region of Sedrun? The decision to choose Sedrun as one of the five construction sites for the Gotthard base tunnel did not only change the ecological and social situation in the region but also has economic effects on the community. Especially the local building sector but also hotels, restaurants and local industry are benefiting from the construction site. To calculate these economic effects for the region of Sedrun we used the method of the incidence analysis. The incidence analysis is a kind of cost-benefit analysis which is especially suited to assess the spatial effects of infrastructural facilities or the service of these facilities. Considering the direct effects we focus on the receipts and expenditures which are directly connected with the realisation of the project. The economic effects could be divided into the so called tangible and intangible effects. Tangible effects are measurable as indirect economic effects (spill-over effects). To measure the indirect economic effects we carry out an interview survey among the workers to calculate the additional economic impacts caused by the expenditures of the workers in the region. The intangible effects could be explained as soft and mostly not quantifiable effects. To acquire the intangible effects we carry out an image analysis based on national newspaper articles about the construction site in Sedrun. In our paper we present the structure and main indicators of the long-term accompanying research and the results of the incidence analysis to calculate the economic effects for the region.
    Date: 2005–08
  6. By: Nigel Peter Stewart Dennis
    Abstract: At a time when the traditional major airlines have struggled to remain viable, the low-cost carriers have become the major success story of the European airline industry. This paper looks behind the headlines to show that although low-cost airlines have achieved much, they too have potential weaknesses and face a number of challenges in the years ahead. The secondary and regional airports that have benefited from low-cost carrier expansion are shown to be vulnerable to future changes in airline economics, government policy and patterns of air service. An analysis of routes from London demonstrates that the low-cost airlines have been more successful in some markets than others. To attractive and historically under-served leisure destinations in Southern Europe they have stimulated dramatic growth and achieved a dominant position. To major hub cities however they typically remain marginal players and to secondary points in Northern Europe their traffic has been largely diverted from existing operators. There is also evidence that the UK market is becoming saturated and new low-cost services are poaching traffic from other low-cost routes. Passenger compensation legislation and possible environmental taxes will hit the low-cost airline industry disproportionately hard. The high elasticities of demand to price in certain markets that these airlines have exploited will operate in reverse. One of the major elements of the low-cost business model involves the use of smaller uncongested airports. These offer faster turn-arounds and lower airport charges. In many cases, local and regional government has been willing to subsidise expansion of air services to assist with economic development or tourism objectives. However, recent court cases against Ryanair now threaten these financial arrangements. The paper also examines the catchment areas for airports with low-cost service. It is shown that as well as stimulating local demand, much traffic is captured from larger markets nearby through the differential in fare levels. This has implications for surface transport, as access to these regional airports often involves long journeys by private car. Consideration is then given to the feasibility of low-cost airlines expanding into the long-haul market or to regional operations with small aircraft. Many of the cost advantages are more muted on intercontinental services – for example, aircraft utilisation is already high and few routes have sufficient local demand without the use of hubbing. Large turbo-prop aircraft such as the DHC Dash 8 400 series offer very good economics compared to regional jets on short to medium sectors where demand is too thin to support a Boeing 737 operation. flybe is using these on certain ‘third level’ routes in Britain and other opportunities are identified in mainland Europe. It is concluded that there are still good growth prospects for low-cost airlines in Europe, especially in France, Italy and some of the new EU member states but rather than growing to dominate the air transport industry, an equilibrium position is likely to be reached. Some regional airports may see their services reduce once the market becomes saturated or the relative competitive position of the major airports and airlines improves.
    Date: 2004–08
  7. By: Andrew Daly; Stephane Hess; Geoff Hyman; John Polak; Charlene Rohr
    Abstract: As a result of increasing road congestion and road pricing, modelling the temporal response of travellers to transport policy interventions has rapidly emerged as a major issue in many practical transport planning studies. A substantial body of research is therefore being carried out to understand the complexities involved in modelling time of day choice. These models are contributing substantially to our understanding of how travellers make time-of-day decisions (Hess et al, 2004; de Jong et al, 2003). These models, however, tend to be far too complex and far too data intensive to be of use for application in large-scale modelling forecasting systems, where socio-economic detail is limited and detailed scheduling information is rarely available. Moreover, model systems making use of the some of the latest analytical structures, such as Mixed Logit, are generally inapplicable in practical planning, since they rely on computer-intensive simulation in application just as well as in estimation. The aim of this paper, therefore, is to describe the development of time-period choice models which are suitable for application in large-scale modelling forecasting systems. Large-scale practical planning models often rely on systems of nested logit models, which can incorporate many of the most important interactions that are present in the complex models but which have low enough run-times to allow them to be used for practical planning. In these systems, temporal choice is represented as the choice between a finite set of discrete alternatives, represented by mutually exclusive time-periods that are obtained by aggregation of the actual observed continuous time values. The issues that face modellers are then: -how should the time periods be defined, and in particular how long should they be? -how should the choices of time periods be related to each other, e.g. is the elasticity for shorter shifts greater than for longer shifts? -how should time period choice be placed in the model system relative to other choices, such as that of the mode of travel? These questions cannot be answered on a purely theoretical basis but require the analysis of empirical data. However, there is not a great deal of data available on the relevant choices. The time period models described in the paper are developed from three related stated preference (SP) studies undertaken over the past decade in the United Kingdom and the Netherlands. Because of the complications involved with using advanced models in large-scale modelling forecasting systems, the model structures are limited to nested logit models. Two different tree structures are explored in the analysis, nesting mode above time period choice or time period choice above mode. The analysis examines how these structures differ by data set, purpose of travel and time period specification. Three time period specifications were tested, dividing the 24-hour day into: -twenty-four 1-hour periods; -five coarse time-periods; -sixteen 15-minute morning-peak periods, and two coarse pre-peak and post-peak periods. In each case, the time periods are used to define both the outbound and the return trip timings. The analysis shows that, with a few exceptions, the nested models outperform the basic Multinomial Logit structures, which operate under the assumption of equal substitution patterns across alternatives. With a single exception, the nested models in turn show higher substitution between alternative time periods than between alternative modes, showing that, for all the time period lengths studied, travellers are more sensitive to transport levels of service in their choice of departure time than in choice of mode. The advantages of the nesting structures are especially pronounced in the 1-hour and 15-minute models, while, in the coarse time-period models, the MNL model often remains the preferred structure; this is a clear effect of the broader time-periods, and the consequently lower substitution between time-periods.
    Date: 2005–08

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