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The conflict between residents and tourists: on the variety-shifting effect of tourism growth

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  • Takaaki Takahashi

    (The University of Tokyo)

Abstract

This study examines the impacts of a rise in international tourism on the welfare of residents. We construct a simple model in which a home country accommodates tourists from a foreign country. We pay special attention to the fact that, in addition to the positive effect of raising wages, tourism growth has two negative effects. First, it replaces the production of residents’ consumption varieties with that of tourists. Second, it raises output prices through the increase in input prices. Our model shows that growing tourism can hurt a worker in the home country when the two negative effects (variety-shifting and price effects) outweigh the positive effect (wage effect).

Suggested Citation

  • Takaaki Takahashi, 2024. "The conflict between residents and tourists: on the variety-shifting effect of tourism growth," The Japanese Economic Review, Springer, vol. 75(1), pages 121-145, January.
    • Handle: RePEc:spr:jecrev:v:75:y:2024:i:1:d:10.1007_s42973-021-00108-5
    DOI: 10.1007/s42973-021-00108-5
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    More about this item

    Keywords

    Tourism growth; Tourism promotion policy; Tourist costs; Variety-shifting effect;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • Z3 - Other Special Topics - - Tourism Economics

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