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The commons and anti-commons problems in the tourism economy

Author

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  • Carmen D. Álvarez-Albelo

    () (Department of Economic Analysis, University of La Laguna, La Laguna, Spain & CREB)

  • Raúl Hernández-Martín

    () (Department of Economic Analysis, University of La Laguna, La Laguna, Spain)

Abstract

Countries specialised in tourism tend to face two problems with contradictory effects: the commons and the anti-commons, which lead to tourism over- and under-production, respectively. This paper develops a two-period model to analyse the joint effects of both problems on a small and remote tourism economy. Congestion and the complementariness between foreign transport and local tourism services are key features in this type of markets. As a result, direct selling and the presence of foreign tour-operators emerge as possible market arrangements with different implications in terms of welfare and public intervention. Four main results are obtained. First, in the direct selling situation the optimal policy depends on the relative importance of the problems. Second, the existence of tour-operators always leads to tourism over-production. Third, the presence of a single tour-operator does not solve the congestion problem. Lastly, the switch from several tour-operators to a single one is welfare reducing.

Suggested Citation

  • Carmen D. Álvarez-Albelo & Raúl Hernández-Martín, 2009. "The commons and anti-commons problems in the tourism economy," Working Papers XREAP2009-16, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2009.
  • Handle: RePEc:xrp:wpaper:xreap2009-16
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    More about this item

    Keywords

    commons; anti-commons; tourism; direct selling; tour-operators; optimal policy;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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