The Commons and Anti-Commons Problems in the Tourism Economy

Document de Treball XREAP2009-16

44 Pages Posted: 2 May 2011

See all articles by Carmen D. Álvarez-Albelo

Carmen D. Álvarez-Albelo

University of La Laguna

Raúl Hernández Martín

University of La Laguna - Department of Applied Economics

Date Written: December 1, 2009

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.

Keywords: commons, anti-commons, tourism, direct selling, tour-operators, optimal policy

JEL Classification: F12, F13, F14, L83

Suggested Citation

Álvarez-Albelo, Carmen D. and Hernández Martín, Raúl, The Commons and Anti-Commons Problems in the Tourism Economy (December 1, 2009). Document de Treball XREAP2009-16, Available at SSRN: https://ssrn.com/abstract=1825005 or http://dx.doi.org/10.2139/ssrn.1825005

Carmen D. Álvarez-Albelo (Contact Author)

University of La Laguna ( email )

La Laguna, Tenerife, 38071
Spain

Raúl Hernández Martín

University of La Laguna - Department of Applied Economics ( email )

Campus de Guajara
Camino de la Hornera s/n 38071 La Laguna
Tenerife
Spain
+34 922317014 (Phone)
+34 922317204 (Fax)

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