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The Economic Impacts of Tourism

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The Economic Impacts of Tourism

Page 1 of 15
The Economic Impacts of Tourism

ABSTRACT
Tourism has been criticised for having negative impacts on many of the destinations which tourists visit. There are considered to be three principal impacts - economic, environmental, & socio-cultural. This study looks at economic impacts and finds that although there are some negative aspects, most economic consequences of tourism are beneficial. These benefits include the effects of price and income elasticity, and also the economic consequences of tourism spending, including the generation of foreign exchange. This process stimulates the local economy through the multiplier effect, which can be direct, indirect, and induced. The article uses three tables to explain the multiplier, and policy implications are reviewed, using Turkish and Jamaican studies as reference points. At the same time, the difficulties faced when calculating multipliers are considered, and also how multipliers in deflationary situations can turn from being positive to negative. Although the economic effects of tourism are usually held to outweigh tourism�s economic benefits, the negatives can be significant. These negatives relate particularly to a likely increase in demand for imported goods once tourists begin to appear, revenue leakages out of the economy, over- dependence on tourism, and land value inflation. The study concludes that the economic benefits of tourism normally outweigh what negative features there may be. But it also acknowledges that the situation is much less clear-cut when considering environmental and socio-cultural issues as opposed to economic ones. INTRODUCTION

Tourism is usually described as having three major types of impacts on many of the places which tourists visit (Cooper et al, 1993). These effects are economic, environmental, and socio-cultural in nature (and some people have mentioned political consequences also). However, some impacts have been attributed to tourism though they may in fact originate...