Working Paper: CEPR ID: DP12644
Authors: Benjamin Faber; Cécile Gaubert
Abstract: Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new em- pirical strategy to study the long-term economic consequences of tourism both locally and in the aggregate. We find that tourism causes large and significant local economic gains relative to less touristic regions that are in part driven by significant positive spillovers on manufacturing. In the aggregate, however, these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from trade in tourism are mainly driven by a classical market integration effect.
Keywords: tourism; economic development; spatial equilibrium; gains from trade
JEL Codes: F15; F63; O24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Tourism activity (Z39) | Local economic outcomes (F69) |
| Increase in local tourism revenues (Z33) | Increase in total employment (J23) |
| Increase in local tourism revenues (Z33) | Increase in nominal municipality GDP (O49) |
| Increase in local tourism revenues (Z33) | Increase in local manufacturing GDP (E20) |
| Public investments in local tourism infrastructure (H54) | Local economic outcomes (F69) |
| Tourism activity (Z39) | National economic gains (O49) |
| Less touristic regions (Z39) | Reductions in agglomeration economies (R11) |