Working Paper: NBER ID: w22300
Authors: Benjamin Faber; Cecile 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 empirical 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; Mexico; Spatial Equilibrium Model
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 (Z30) | Local Economic Gains (R11) |
| 10% increase in local tourism revenues (Z33) | 25% increase in total municipality employment (J68) |
| 10% increase in local tourism revenues (Z33) | 4% increase in nominal municipality GDP (H79) |
| 10% increase in local tourism revenues (Z33) | 39% increase in local manufacturing GDP (L69) |
| Local Tourism Development (Z33) | Gains for Households (G59) |
| Classical Market Integration Effects (F16) | Aggregate Benefits (J32) |
| Local Spillovers (F69) | Aggregate Benefits (J32) |
| International Tourism (Z30) | Local Manufacturing Scale (L60) |