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The everyday cost of paradise: seasonal grocery inflation as a tourism-led externality

Author

Listed:
  • Kuliš, Zvonimir
  • Mikulic, Josip
  • Srhoj, Stjepan

Abstract

This study conceptualizes tourism-led grocery inflation as a cost-of-living externality affecting everyday goods. Using retailer-published price microdata for Croatia, it aggregates 1.3 billion daily observations into monthly datasets covering May-October 2025. Prices are already higher in tourism-intensive coastal municipalities in May and then show additional coastal price growth over the summer, tracing an inverted U-shaped pattern that peaks in July-August and moderates by October. The pattern persists for essential goods and identical barcode-matched products. Retailer responses are heterogeneous: some chains show stronger coastal price increases during the peak season, while others show little or no coastal-inland differential. The findings identify a resident-facing tourism externality and support local cost-of-living monitoring to inform place-sensitive policy.

Suggested Citation

  • Kuliš, Zvonimir & Mikulic, Josip & Srhoj, Stjepan, 2026. "The everyday cost of paradise: seasonal grocery inflation as a tourism-led externality," GLO Discussion Paper Series 1774, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1774
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    File URL: https://www.econstor.eu/bitstream/10419/341432/1/GLO-DP-1774.pdf
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    References listed on IDEAS

    as
    1. Mikulić, Josip & Vitezić, Vanja & Srhoj, Stjepan & Kuliš, Zvonimir, 2024. "Tourism boom, housing doom: Excessive tourism and international emigration," Annals of Tourism Research, Elsevier, vol. 109(C).
    2. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
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    More about this item

    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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