Is Tourism-Based Development Good for the Poor? A General Equilibrium Analysis for Thailand

Anan Wattanakuljarus and Ian Coxhead

No 10279, Staff Papers from University of Wisconsin-Madison, Department of Agricultural and Applied Economics

Abstract: The popularity of tourism as a component of development strategy in low-income countries is founded in part upon the belief that expansion of this industry will improve income distribution by greatly expanding demand for relatively low-skilled labor. We examine this belief for the case of Thailand, a highly tourism-intensive economy, using a new and specifically-designed applied general equilibrium model. A boom in inbound tourism demand generates foreign exchange and raises household incomes across the board, but worsens their distribution. Tourism sectors are not especially labor-intensive, and the expansion of foreign tourism demand brings about a real appreciation that undermines profitability and reduces employment in tradable sectors, notably agriculture, from which the poor derive a substantial fraction of their income. We examine the robustness of these results with respect to alternative factor market assumptions relevant to the Thai economy.

Keywords: International; Development (search for similar items in EconPapers)
Pages: 52
Date: 2006
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Is tourism-based development good for the poor?: A general equilibrium analysis for Thailand (2008)
Working Paper: Is Tourism-Based Development Good for the Poor? A General Equilibrium Analysis for Thailand (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:wisagr:10279

DOI: 10.22004/ag.econ.10279

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