IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00310514.html
   My bibliography  Save this paper

A Dynamic Model of Tourism, Employment and Welfare: The Case of Hong Kong

Author

Listed:
  • Chi-Chur Chao

    (CUHK - The Chinese University of Hong Kong [Hong Kong])

  • Bharat R. Hazari

    (CUHK - City University of Hong Kong [Hong Kong])

  • Jean-Pierre Laffargue

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Eden S. H. Yu

    (CUHK - City University of Hong Kong [Hong Kong])

Abstract

The present paper uses a dynamic open-economy model with wage indexation to examine the impact of tourism on employment and welfare. Both short-run and long-run situations are analysed. It is well known that tourism converts non-traded goods into tradable goods. An increase in the demand for a non-traded good raises its relative price, which results in an expansion of the non-traded sector at the expense of the traded goods sector. This output shift raises labour employment in the short run. However, in the long run, the higher relative price leads to higher wages, resulting in a negative impact on labour employment. If the output effect is dominant, the expansion in tourism raises employment and welfare. However, under realistic conditions tourism may lower both labour employment and welfare due to rising costs. These results are demonstrated by simulating a dynamic model for the case of Hong Kong.

Suggested Citation

  • Chi-Chur Chao & Bharat R. Hazari & Jean-Pierre Laffargue & Eden S. H. Yu, 2009. "A Dynamic Model of Tourism, Employment and Welfare: The Case of Hong Kong," Post-Print halshs-00310514, HAL.
  • Handle: RePEc:hal:journl:halshs-00310514
    DOI: 10.1111/j.1468-0106.2009.00441.x
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chi‐Chur Chao & Bharat R. Hazari & Jean‐Pierre Laffargue & Pasquale M. Sgro & Eden S. H. Yu, 2006. "Tourism, Dutch Disease And Welfare In An Open Dynamic Economy," The Japanese Economic Review, Japanese Economic Association, vol. 57(4), pages 501-515, December.
    2. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    3. Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 98-116.
    4. Giovanni Ferro Luzzi & Yves Fl¸ckiger, 2003. "Tourism And International Trade: Introduction," Pacific Economic Review, Wiley Blackwell, vol. 8(3), pages 239-243, October.
    5. Chi‐Chur Chao & Bharat R. Hazari & Jean‐Pierre Laffargue & Pasquale M. Sgro & Eden S. H. Yu, 2006. "Tourism, Dutch Disease And Welfare In An Open Dynamic Economy," The Japanese Economic Review, Japanese Economic Association, vol. 57(4), pages 501-515, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Shahbaz & Ramzi Benkraiem & Anthony Miloudi & Aviral Kumar Tiwari, 2019. "Tourism-induced financial development in Malaysia: New evidence from the tourism development index," Tourism Economics, , vol. 25(5), pages 757-778, August.
    2. Zhang, Wei-Bin, 2015. "Tourism, Trade, Externalities, And Public Goods In A Three-Sector Growth Model," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 6(1), pages 1-19.
    3. Wei-Bin Zhang, 2017. "Education and Tourism in a Small Open Growth Economy," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 643-666, November.
    4. Wei-Bin ZHANG, 2015. "Tourism, Trade And Wealth Accumulation With Endogenous Income And Wealth Distribution Among Countries," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 4(1), pages 1-1, January.
    5. Zhang Wei-Bin, 2020. "Economic Development and International and Interregional Tourism," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 13(4), pages 375-387, December.
    6. Wei-Bin ZHANG, 2016. "Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 103-126, Winter.
    7. Zhang Wei-Bin, 2017. "A Multi-Country Trade and Tourism with Endogenous Capital and Knowledge," Business Systems Research, Sciendo, vol. 8(1), pages 71-91, March.
    8. Ladson Pires Andrade & Hassane Mahamad Velonjara, 2020. "The Impact of Tourism on Economic Growth: A Panel Co-integration from the Community of Portuguese-speaking Countries (CPLP)," Business and Economic Research, Macrothink Institute, vol. 10(3), pages 281-291, September.
    9. Wei-Bin ZHANG, 2016. "Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 103-126, Winter.
    10. Wei-Bin Zhang, 2017. "Spatial Agglomeration And Economic Development With The Inclusion Of Interregional Tourism," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(213), pages 93-128, April - J.
    11. Amin Sokhanvar & Glenn P. Jenkins, 2021. "An Efficient Long-Run Economic Growth Strategy for Estonia," Development Discussion Papers 2020-23, JDI Executive Programs.
    12. Chou, Ming Che, 2013. "Does tourism development promote economic growth in transition countries? A panel data analysis," Economic Modelling, Elsevier, vol. 33(C), pages 226-232.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Wei-Bin, 2015. "Tourism, Trade, Externalities, And Public Goods In A Three-Sector Growth Model," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 6(1), pages 1-19.
    2. Wei-Bin Zhang, 2017. "Education and Tourism in a Small Open Growth Economy," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 643-666, November.
    3. Nakakuki, Masayuki & Otani, Akira & Shiratsuka, Shigenori, 2004. "Distortions in Factor Markets and Structural Adjustments in the Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(2), pages 71-99, May.
    4. John M. Piotrowski & Mr. Rabah Arezki & Reda Cherif, 2009. "Tourism Specialization and Economic Development: Evidence from the UNESCO World Heritage List," IMF Working Papers 2009/176, International Monetary Fund.
    5. Chao, Chi-Chur & Hazari, Bharat R. & Sgro, Pasquale M. & Laffargue, Jean-Pierre & Yu, Eden S.H., 2005. "Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis," Natural Resources Management Working Papers 12149, Fondazione Eni Enrico Mattei (FEEM).
    6. Richard A. Brecher & Zhihao Yu, 2021. "Trade-Induced Reduction In Unemployment Of A High-Wage Economy: A Minimum-Wage Model With Country-Specific Technology," Carleton Economic Papers 21-04, Carleton University, Department of Economics.
    7. Raffaello Bronzini & Emanuele Ciani & Francesco Montaruli, 2022. "Tourism and local growth in Italy," Regional Studies, Taylor & Francis Journals, vol. 56(1), pages 140-154, January.
    8. Juin‐Jen Chang & Lee‐Jung Lu & Shih‐Wen Hu, 2011. "Congestion Externalities of Tourism, Dutch Disease and Optimal Taxation: Macroeconomic Implications," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 90-108, March.
    9. Helpman, Elhanan & Itskhoki, Oleg & Redding, Stephen J., 2010. "Trade and labor market outcomes," LSE Research Online Documents on Economics 121937, London School of Economics and Political Science, LSE Library.
    10. Stauvermann, Peter Josef & Kumar, Ronald Ravinesh, 2016. "Economics of tourism & growth for small island countries," Tourism Management, Elsevier, vol. 55(C), pages 272-275.
    11. Claudio Calero & Lindsay W Turner, 2020. "Regional economic development and tourism: A literature review to highlight future directions for regional tourism research," Tourism Economics, , vol. 26(1), pages 3-26, February.
    12. Wei-Bin ZHANG, 2016. "Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 103-126, Winter.
    13. Gianandrea Lanzara & G. Alfredo Minerva, 2019. "Tourism, amenities, and welfare in an urban setting," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 452-479, June.
    14. Yun Tong & Rui Zhang & Biao He, 2022. "The Carbon Emission Reduction Effect of Tourism Economy and Its Formation Mechanism: An Empirical Study of China’s 92 Tourism-Dependent Cities," IJERPH, MDPI, vol. 19(3), pages 1-21, February.
    15. Elhanan Helpman, 2014. "Foreign Trade and Investment: Firm-level Perspectives," Economica, London School of Economics and Political Science, vol. 81(321), pages 1-14, January.
    16. Nesrin Tuncay & Ceyhun Can Özcan, 2020. "The effect of Dutch disease in the tourism sector: the case of Mediterranean countries," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 26(1), pages 97-114, June.
    17. Taotao Deng & Mulan Ma & Jianhua Cao, 2014. "Tourism Resource Development and Long-Term Economic Growth: A Resource Curse Hypothesis Approach," Tourism Economics, , vol. 20(5), pages 923-938, October.
    18. Rossana Patrón, 1997. "Terms of Trade Shocks and Minimum wages for Dual Labour Market: A CGE Analysis," Documentos de Trabajo (working papers) 0397, Department of Economics - dECON.
    19. Marija Beg & Martina Basarac Serti?, 0000. "The Signs Of Dutch Disease In Croatia," Proceedings of Economics and Finance Conferences 11413238, International Institute of Social and Economic Sciences.
    20. Shahzad, Syed Jawad Hussain & Shahbaz, Muhammad & Ferrer, Román & Kumar, Ronald Ravinesh, 2017. "Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach," Tourism Management, Elsevier, vol. 60(C), pages 223-232.

    More about this item

    Keywords

    Dynamic Model of Tourism;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00310514. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.