The potential implications of environmental deterioration on business and non-business visitor expenditures in a natural setting

Putu Liza Kusuma Mustika, Natalie Stoeckl and Marina Farr
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Putu Liza Kusuma Mustika: James Cook University, Australia
Marina Farr: James Cook University, Australia

Tourism Economics, 2016, vol. 22, issue 3, 484-504

Abstract: Nature-based tourism can be an important source of income for regional economies but relies on a healthy environment. Using data collected from business and non-business visitors to Australia’s coast adjacent to the Great Barrier Reef, the authors generate estimates of the potential financial impact of environmental degradation, demonstrating a novel way of testing and controlling for hypothetical response bias. More than 90% of non-business visitors and 67% of business visitors came to the region for at least one nature-related reason. Average daily expenditure was similar for both visitor segments (≈AUD$190), but the determinants of expenditure varied. All visitors reacted much more negatively to the prospect of environmental degradation than to a 20% increase in (local) prices, although business visitors were much less responsive than non-business visitors. Adjusting for hypothetical response bias, the authors estimate that substantial environmental degradation could reduce visitor expenditures (and thus local tourism incomes) by at least 17%.

Keywords: business and non-business visitors; environmental degradation; Great Barrier Reef; hypothetical response bias; visitor expenditure (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:22:y:2016:i:3:p:484-504

DOI: 10.5367/te.2014.0433

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