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Is Tourism-Based Development Good for the Poor? A General Equilibrium Analysis for Thailand

Author

Listed:
  • Wattanakuljarus, Anan

    (U of Wisconsin)

  • Coxhead, Ian

Abstract

The popularity of tourism as a component of development strategy in low-income countries is founded in part upon the belief that expansion of this industry will improve income distribution by greatly expanding demand for relatively low-skilled labor. We examine this belief for the case of Thailand, a highly tourismintensive economy, using a new and specifically-designed applied general equilibrium model. A boom in inbound tourism demand generates foreign exchange and raises household incomes across the board, but worsens their distribution. Tourism sectors are not especially labor-intensive, and the expansion of foreign tourism demand brings about a real appreciation that undermines profitability and reduces employment in tradable sectors, notably agriculture, from which the poor derive a substantial fraction of their income. We examine the robustness of these results with respect to alternative factor market assumptions relevant to the Thai economy.

Suggested Citation

  • Wattanakuljarus, Anan & Coxhead, Ian, 2006. "Is Tourism-Based Development Good for the Poor? A General Equilibrium Analysis for Thailand," Staff Paper Series 502, University of Wisconsin, Agricultural and Applied Economics.
  • Handle: RePEc:ecl:wisagr:502
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    References listed on IDEAS

    as
    1. Jean-Jacques Nowak & Mondher Sahli & Pasquale M. Sgro, 2003. "Tourism, Trade And Domestic Welfare," Pacific Economic Review, Wiley Blackwell, vol. 8(3), pages 245-258, October.
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    6. Ramos Mabugu, 2002. "Short-term effects of policy reform on tourism and the macroeconomy in Zimbabwe: Applied CGE analysis," Development Southern Africa, Taylor & Francis Journals, vol. 19(3), pages 419-430.
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    Cited by:

    1. repec:eee:touman:v:32:y:2011:i:5:p:1223-1228 is not listed on IDEAS
    2. Zibanai ZHOU, 2013. "A Peep into Tourism Development in Zimbabwe: 1980-2010," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(7), pages 884-894, July.
    3. repec:eee:touman:v:62:y:2017:i:c:p:253-263 is not listed on IDEAS
    4. repec:eee:touman:v:34:y:2013:i:c:p:25-36 is not listed on IDEAS
    5. Mohamed KARIM & Eric Tchouamou NJOYA, 2013. "Impact of Inbound Tourism in Kenyan Economy: An Analysis Using a Computable General Equilibrium Model," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(7), pages 911-932, July.
    6. repec:eee:touman:v:60:y:2017:i:c:p:177-187 is not listed on IDEAS
    7. Gavrel, Frédéric & Lebon, Isabelle & Rebière, Thérèse, 2010. "Layoff taxes and minimum wage: Two complementary public policies," Economics Letters, Elsevier, vol. 107(1), pages 30-32, April.
    8. Sofyan SYAHNUR, "undated". "The Analysis of the Impact of Oil Prices Shock on the Poor Relied on the Existing Distribution of Income Pattern," EcoMod2010 259600162, EcoMod.
    9. Wianwiwat, S. & Asafu-Adjaye, J., 2011. "Modelling the promotion of biomass use: A case study of Thailand," Energy, Elsevier, vol. 36(3), pages 1735-1748.
    10. Shi, Hui, 2012. "The efficiency of government promotion of inbound tourism: The case of Australia," Economic Modelling, Elsevier, vol. 29(6), pages 2711-2718.
    11. Ponjan, Pathomdanai & Thirawat, Nipawan, 2016. "Impacts of Thailand’s tourism tax cut: A CGE analysis," Annals of Tourism Research, Elsevier, vol. 61(C), pages 45-62.
    12. repec:eee:touman:v:48:y:2015:i:c:p:11-20 is not listed on IDEAS
    13. Inchausti-Sintes, Federico, 2015. "Tourism: Economic growth, employment and Dutch Disease," Annals of Tourism Research, Elsevier, vol. 54(C), pages 172-189.
    14. Li, ShiNa & Blake, Adam & Thomas, Rhodri, 2013. "Modelling the economic impact of sports events: The case of the Beijing Olympics," Economic Modelling, Elsevier, vol. 30(C), pages 235-244.
    15. Wianwiwat, Suthin & Asafu-Adjaye, John, 2013. "Is there a role for biofuels in promoting energy self sufficiency and security? A CGE analysis of biofuel policy in Thailand," Energy Policy, Elsevier, vol. 55(C), pages 543-555.
    16. Petit, Sylvain, 2016. "International trade in services and inequalities: Empirical evaluation and role of tourism services," MPRA Paper 75206, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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