An Optimal Size for Rural Tourism Villages with Agglomeration and Club-Good Effects
AbstractHelping to sustain a viable rural sector, rural tourism enjoys public support in many countries. We claim that due to club-good and agglomeration externalities in the rural accommodation market, public support should be integrated in a broader local development policy that regulates the number of accommodation units in a locality. To demonstrate this we extended an equilibrium model that accounts for product differentiation and oligopolistic competition to address club-good and agglomeration effects and applied it to data collected in north Israel. We show that under the prevailing regulation, the number of units is by far higher than the social optimum.
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Bibliographic InfoPaper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 93135.
Date of creation: 2010
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Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
Web page: http://departments.agri.huji.ac.il/economics/indexe.html
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Community/Rural/Urban Development; International Development; Political Economy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
- NEP-TUR-2010-09-11 (Tourism Economics)
- NEP-URE-2010-09-11 (Urban & Real Estate Economics)
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