Economics at your fingertips  

Air passenger duties as strategic tourism taxation

Álvarez-Albelo, Carmen D., Hernández-Martín, Raúl and Padrón-Fumero, Noemi
Authors registered in the RePEc Author Service: Noemi Padron Fumero ()

Tourism Management, 2017, vol. 60, issue C, 442-453

Abstract: There has been a recent debate on the rationale and economic impacts of air passenger duties (APDs) linked to puzzling empirical results on this topic. We argue that an approach from strategic tourism taxation can improve our understanding of these results. APD set by origin countries of tourists can be viewed as an instrument for extracting economic rents that would otherwise be retained by tourism destinations. A theoretical model of strategic taxation between an origin and two destinations is developed to illustrate this idea. We find that countries' strategies may end up with winners and losers, or with all parties facing welfare losses. The game outcome depends on countries' market shares of profits and the substitutability between tourism services provided by different destinations. The findings suggest that the economic impacts of APDs recently evaluated in the literature might be biased because of the omission of other countries' potential tax reactions.

Keywords: Air passenger duties; Strategic tourism taxation; Rent extraction (search for similar items in EconPapers)
JEL-codes: F19 H29 L83 R49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

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:

Access Statistics for this article

Tourism Management is currently edited by Chris Ryan

More articles in Tourism Management from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-04-12
Handle: RePEc:eee:touman:v:60:y:2017:i:c:p:442-453