nep-tur New Economics Papers
on Tourism Economics
Issue of 2010‒08‒21
five papers chosen by
Antonello Scorcu
University of Bologna

  1. Tourism and Economic Development: the Beach Disease? By Mario Holzner
  2. Aggregation, Heterogeneous Autoregression and Volatility of Daily International Tourist Arrivals and Exchange Rates By Chia-Lin Chang; Michael McAleer
  3. Tourism productivity: incentives and obstacles to fostering growth By Stefania Lionetti
  4. The impact of the global financial turmoil and recession on Mediterranean countries’ economies By Michael Sturm; Nicolas Sauter
  5. Local food systems: concepts, impacts, and issues By Martinez, Steve; Hand, Michael; Da Pra, Michelle; Pollack, Susan; Ralston, Katherine; Smith, Travis; Vogel, Stephen; Clarke, Shellye; Lohr, Luanne; Low, Sarah; Newman, Constance

  1. By: Mario Holzner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses empirically the danger of a Dutch Disease Effect in tourism-dependent countries in the long run. Data on 134 countries of the world over the period 1970-2007 is used. In a first step the long-run relationship between tourism and economic growth is analysed in a cross-country setting. The results are then checked in a panel data framework on GDP per capita levels that allows to control for reverse causality, non-linearity and interactive effects. It is found that there is no danger of a Beach Disease Effect. On the contrary, tourism-dependent countries do not face real exchange rate distortion and deindustrialization but higher than average economic growth rates. Investment in physical capital, such as transport infrastructure, is complementary to investment in tourism.
    Keywords: tourism, Dutch Disease, economic development
    JEL: F43 L83 O14
    Date: 2010–06
  2. By: Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University)
    Abstract: TTourism is a major source of service receipts. The two leading tourism countries for Taiwan are Japan and USA. Daily data from 1/1/1990 to 31/12/2008 are used to model tourist arrivals from the world, USA and Japan to Taiwan, as well as their associated volatility. Inclusion of the exchange rate allows approximate daily price effects to be captured. The Heterogeneous Autoregressive (HAR) model is used to approximate long memory properties in daily exchange rates and international tourist arrivals, test whether alternative short and long run estimates of conditional volatility are sensitive to the approximate long memory in the conditional mean, examine asymmetry and leverage in volatility, and examine the effects of temporal and spatial aggregation. Asymmetry (though not leverage) is found for several alternative HAR models. For policy purposes, the empirical results suggest that an arbitrary choice of data frequency or spatial aggregation will not lead to robust findings.
    Keywords: International tourist arrivals, exchange rates, global financial crisis, GARCH, GJR, EGARCH, HAR, approximate long memory, temporal aggregation, spatial aggregation, daily effects, weekly effects, asymmetry, leverage.
    JEL: C22 F31 G18 G32
    Date: 2010–08
  3. By: Stefania Lionetti (Institute of Economic Research, University of Lugano)
    Abstract: This paper intends firstly to estimate tourism productivity in 208 countries in the years 1990, 1995, 2000 and 2004. Secondly, it analyzes if the differential of productivity across countries could be due to some structural characteristics of the countries themselves. The study uses a stochastic production frontier approach and a technical efficiency model to analyze the determinants of efficiency across countries. Private capital and labour result to be more influential than public capital on the number of arrivals. The results suggest that the tertiary school enrolment, the level of communication technologies, the country openness to international trade all significantly contribute to efficiency.
    Keywords: Tourism productivity; Economic growth; Labor; Public capital; Private capital
    JEL: D24 L83 O10 O40 O50
    Date: 2010–07
  4. By: Michael Sturm (European Central Bank, Directorate General International and European Relations, Kaiserstrasse 29, 60311 Frankfurt am Main); Nicolas Sauter (European Central Bank, Directorate General International and European Relations, Kaiserstrasse 29, 60311 Frankfurt am Main)
    Abstract: This paper reviews the impact of the global financial turmoil and the subsequent recession on the economies of southern and eastern Mediterranean countries. The major effects on the economies of this region have come through transmission channels associated with the real economy, i.e. the global recession. These are, in particular, declines in exports, oil revenues, tourism receipts, remittances and foreign direct investment (FDI) inflows, with the drop in exports so far appearing to have had the strongest impact. As a result, real GDP growth has weakened in the wake of the global crisis. However, the weakening of economic activity in the Mediterranean region has been less pronounced than in advanced economies and most other emerging market regions. The main reason for this is that the direct impact of the global financial turmoil on banking sectors and financial markets in Mediterranean countries has been relatively limited. This is mainly due to (i) their lack of exposure to US mortgage-related assets that turned “toxic”, a feature the region shares with other emerging markets, and (ii) the limited financial development of many countries in the region and their limited integration into global financial markets, a feature that distinguishes the region from other emerging markets and, in particular, from the euro area’s neighbours to the east. Notwithstanding the relative resilience of southern and eastern Mediterranean countries in the wake of the global crisis, the region faces significant challenges. In particular, many countries need significantly higher growth rates to address the employment challenge posed as a consequence of demographic developments. JEL Classification: R11, E60, G21
    Keywords: Global economic crisis, Mediterranean countries, financial sector, international spillovers
    Date: 2010–08
  5. By: Martinez, Steve; Hand, Michael; Da Pra, Michelle; Pollack, Susan; Ralston, Katherine; Smith, Travis; Vogel, Stephen; Clarke, Shellye; Lohr, Luanne; Low, Sarah; Newman, Constance
    Abstract: Consumer demand for food that is locally produced,marketed, and consumed is generating increased interest in local food throughout the United States. As interest grows, so do questions about what constitutes local food and what characterizes local food systems. What Is the Issue? This study provides a comprehensive literature-review-based overview of the current understanding of local food systems, including: alternative defi nitions; estimates of market size and reach; descriptions of the characteristics of local food consumers and producers; and an examination of early evidence on the economic and health impacts of such systems. What Did the Study Find? There is no generally accepted definition of “local” food. Though “local” has a geographic connotation, there is no consensus on a definition in terms of the distance between production and consumption. Definitions related to geographic distance between production and sales vary by regions, companies, consumers, and local food markets. According to the definition adopted by the U.S. Congress in the 2008 Food, Conservation, and Energy Act,the total distance that a product can be transported and still be considered a “locally or regionally produced agricultural food product” is less than 400 miles from its origin, or within the State in which it is produced. Definitions based on market arrangements, including direct-to-consumer arrangements such as regional farmers’ markets, or direct-to-retail/foodservice arrangements such as farm sales to schools, are well-recognized categories and are used in this report to provide statistics on the market development of local foods. Local food markets account for a small but growing share of total U.S. agricultural sales. • Direct-to-consumer marketing amounted to $1.2 billion in current dollar sales in 2007, according to the 2007 Census of Agriculture, compared with $551 million in 1997. • Direct-to-consumer sales accounted for 0.4 percent of total agricultural sales in 2007, up from 0.3 percent in 1997. If nonedible products are excluded from total agricultural sales, direct-to consumer sales accounted for 0.8 percent of agricultural sales in 2007. • The number of farmers’ markets rose to 5,274 in 2009, up from 2,756 in 1998 and 1,755 in 1994, according to USDA’s Agricultural Marketing Service. • In 2005, there were 1,144 community-supported agriculture organizations, up from 400 in 2001 and 2 in 1986, according to a study by the National Center for Appropriate Technology. In early 2010, estimates exceeded 1,400, but the number could be much larger. • The number of farm to school programs, which use local farms as food suppliers for school meals programs and promote relationships between schools and farms, increased to 2,095 in 2009, up from 400 in 2004 and 2 in the 1996-97 school year, according to the National Farm to School Network. Data from the 2005 School Nutrition and Dietary Assessment Survey, sponsored by USDA’s Food and Nutrition Service, showed that 14 percent of school districts participated in Farm to School programs, and 16 percent reported having guidelines for purchasing locally grown produce. Production of locally marketed food is more likely to occur on small farms located in or near metropolitan counties. Local food markets typically involve small farmers, heterogeneous products, and short supply chains in which farmers also perform marketing functions, including storage, packaging, transportation, distribution, and advertising. According to the 2007 U.S. Census of Agriculture, most farms that sell directly to consumers are small farms with less than $50,000 in total farm sales, located in urban corridors of the Northeast and the West Coast. In 2007, direct-to-consumer sales accounted for a larger share of sales for small farms, as defi ned above, than for medium-sized farms (total farm sales of $50,000 to $499,999) and large farms (total farm sales of $500,000 or more). Produce farms engaged in local marketing made 56 percent of total agricultural direct sales to consumers, while accounting for 26 percent of all farms engaged in direct-to-consumer marketing. Direct-to-consumer sales are higher for the farms engaged in other entrepreneurial activities, such as organic production, tourism, and customwork (planting, plowing, harvesting, etc. for others), than for other farms. In 2007, direct sales by all U.S. farms surpassed customwork to become the leading on-farm entrepreneurial activity in terms of farm household participation. Barriers to local food-market entry and expansion include: capacity constraints for small farms and lack of distribution systems for moving local food into mainstream markets; limited research, education, and training for marketing local food; and uncertainties related to regulations that may affect local food production, such as food safety requirements. Consumers who value high-quality foods produced with low environmental impact are willing to pay more for locally produced food. Several studies have explored consumer preferences for locally produced food. Motives for “buying local” include perceived quality and freshness of local food and support for the local economy. Consumers who are willing to pay higher prices for locally produced foods place importance on product quality, nutritional value, methods of raising a product and those methods’ effects on the environment, and support for local farmers. Federal, State, and local government programs increasingly support local food systems. Many existing government programs and policies support local food initiatives, and the number of such programs is growing. Federal policies have grown over time to include the Community Food Project Grants Program, the WIC Farmers’ Market Nutrition Program, Senior Farmers’ Market Nutrition Program, Federal State Marketing Improvement Program, National Farmers’ Market Promotion Program, Specialty Crop Block Grant Program, and the Community Facilities Program. State and local policies include those related to farm-to-institution procurement, promotion of local food markets, incentives for low-income consumers to shop at farmers’ markets, and creation of State Food Policy Councils to discuss opportunities and potential impact of government intervention. (WIC is the acronym for the Special Supplemental Nutrition Program for Women, Infants, and Children). As of early 2010, there were few studies on the impact of local food markets on economic development, health, or environmental quality. • Empirical research has found that expanding local food systems in a community can increase employment and income in that community. • Empirical evidence is insuffi cient to determine whether local food availability improves diet quality or food security. • Life-cycle assessments—analyses of energy use at all stages of the food system including consumption and disposal—suggest that localization can but does not necessarily reduce energy use or greenhouse gas emissions. How Was the Study Conducted? Existing analyses of local food markets by universities, government agencies, national nonprofit organizations, and others of local food markets were synthesized to evaluate the definition of local foods and the effects of local food systems on economic development, health and nutrition, food security, and energy use and greenhouse gas emissions. The report’s content relies on data collected through the 2007 Census of Agriculture, as well as other surveys by USDA’s Agricultural Marketing Service, the National Farm to School Network, university extension departments, and others, to provide a comprehensive picture of types of local food markets, their characteristics, and their importance over time.
    Keywords: Local food systems; farmers’ markets; direct-to-consumer marketing; direct-to-retail/foodservice marketing; community supported agriculture; farm to school programs; Farmers’ Market Promotion Program; food miles; ERS; USDA
    JEL: L1
    Date: 2010–05

This nep-tur issue is ©2010 by Antonello Scorcu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.