Tourism Taxation and Environmental Quality in a Model with Vertical Differentiation
AbstractThe environmental quality of destination has become a tool that hotels have to hold the tourism demand. In this paper we are going to present a model of vertical differentiation in the accommodation industry, where differentiation is associated with quality. Additionally, we assume the existence of a lump sum tax in the accommodation industry. Two are the main results which will be proved in this article; first, if the tourist's willingness to pay for quality increases then both the demand and the price for tourism services increase as a result. However, the increment of the demand for best environmental quality gets higher, and therefore, the environmental quality level of tourism services, that the destination offers, decreases. Second, an increase in the value of the tourism tax leads to an increase in the total environmental quality of the destination.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25305.
Date of creation: 10 Sep 2008
Date of revision: 19 Dec 2008
Publication status: Published in TOURISMOS: An International Multidisciplinary Journal of Tourism 1.4(2009): pp. 45-62
duopoly; tourism demand; hotel service quality; environment;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- M1 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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