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Land, Environmental Externalities and Tourism Development

Author

Listed:
  • Javier Lozano Ibáñez

    (Department of Applied Economics, University of the Balearic Islands and Centre de Recerca Econòmica (CRE))

  • Javier Rey-Maquieira Palmer

    (Department of Applied Economics, University of the Balearic Islands and Centre de Recerca Econòmica (CRE))

  • Carlos Mario Gómez Gómez

    (Department of Economic Foundations and Economic History, University of Alcalá de Henares)

Abstract

In a two sectors dynamic model we analyze the process of tourism development based on the accumulation of capital (building of tourism facilities) and the reallocation of land from traditional activities to the tourism sector. The model incorporates the conflict between occupation of the territory by the tourism facilities, other productive activities and availability of cultural, natural and environmental assets that are valued by residents and visitors. We characterize the process of tourism development in two settings: the socially optimal solution and a situation where the costs of tourism expansion are external to the decision makers, where externalities on residents as well as intraindustry externalities are considered. Regarding the optimal solution, we show that it is optimal to limit tourism expansion before it reaches its maximum capacity even in a context where the economic attractiveness of tourism relative to other productive sectors rise continuously. However, in this context and when all the costs of tourism development are externalities the only limit to tourism quantitative expansion is its maximum capacity determined by the availability of land. Finally, we show that excessive environmental degradation from the future generations’ point of view is not a problem of discounting the future but rather a problem of externalities that affects negatively the current and future generations.

Suggested Citation

  • Javier Lozano Ibáñez & Javier Rey-Maquieira Palmer & Carlos Mario Gómez Gómez, 2004. "Land, Environmental Externalities and Tourism Development," Working Papers 2004.22, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.22
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    References listed on IDEAS

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    3. Drake, Lars, 1992. "The Non-market Value of the Swedish Agricultural Landscape," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 19(3), pages 351-364.
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    Cited by:

    1. Gasparino, Ugo & Bellini, Elena & del Corpo, Barbara & Malizia, William, 2008. "Measuring the Impact of Tourism Upon Urban Economies: A Review of Literature," Knowledge, Technology, Human Capital Working Papers 37846, Fondazione Eni Enrico Mattei (FEEM).
    2. Cerina, Fabio, 2006. "Tourism Specialization and Sustainability: A Long-Run Policy Analysis," Natural Resources Management Working Papers 12142, Fondazione Eni Enrico Mattei (FEEM).

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    More about this item

    Keywords

    Intertemporal land allocation; Structural economic change; Tourism industry;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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