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An Optimal Size for Rural Tourism Villages with Agglomeration and Club-Good Effects

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  • Tchetchik, Anat
  • Fleischer, Aliza
  • Finkelshtain, Israel

Abstract

Helping 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.

Suggested Citation

  • Tchetchik, Anat & Fleischer, Aliza & Finkelshtain, Israel, 2010. "An Optimal Size for Rural Tourism Villages with Agglomeration and Club-Good Effects," Discussion Papers 93135, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    • Handle: RePEc:ags:huaedp:93135
    DOI: 10.22004/ag.econ.93135
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    Cited by:

    1. Ciani, Adriano, 2014. "Exploring best practices in territorial management for rural tourism and agritourism," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 189668, European Association of Agricultural Economists.

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    Keywords

    Community/Rural/Urban Development; International Development; Political Economy;
    All these keywords.

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