Second Homes vs. Hotels: A Suggestion for a Self-enforcing Policy

Guido Candela (), Massimiliano Castellani () and Maurizio Mussoni ()
Additional contact information
Guido Candela: University of Bologna and The Rimini Centre for Economics Analysis, Italy
Massimiliano Castellani: University of Bologna and The Rimini Centre for Economics Analysis, Italy

Working Paper Series from The Rimini Centre for Economic Analysis

Abstract: We set up a theoretical model, in which the policy maker of a tourism destination has to choose how to allocate the limited natural resource - land - between private holiday accommodations (i.e. second homes) or hotels. In a framework of partial equilibrium, the policy maker minimizes a loss function which measures the loss of political consensus and is de ned by a linear combination of the policy maker and the local community preferences. We can obtain both a corner solution, in which we have extreme choices of only holiday houses or only hotels, and an internal solution, in which we have a linear combination of them. To do that the policy maker can use as economic policy instruments either standard policies (indirect control - a Pigou tax - or direct control - regulation) or non-standard policies (a reinvestment commitment of the rm in the tourism destination). The final policy maker decision was made by assessing the welfare consequences of the policy implications.

JEL-codes: R52 D71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-tur and nep-ure
Date: 2007-07, Revised 2007-07
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.rcfea.org/RePEc/pdf/wp50_07.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:rim:rimwps:50-07

Access Statistics for this paper

More papers in Working Paper Series from The Rimini Centre for Economic Analysis
Contact information at EDIRC.
Series data maintained by Roberto Patuelli ().