Preservation of environmental quality and tourist investments
Keywords:Environmental investment, hotel chain, Hotelling competition, sustainable tourism
We develop a theoretical model to analyze the incentives for hotel chains to make environmentally friendly investments. We show that the level of investment of hotel chains to improve the environmental quality of a tourist destination depends positively on two factors: tourist demand and the level of aggregate income. The framework is based on a model of horizontal differentiation à la Hotelling. By introducing a demand function for tourist commodities, we show that an increase in total income encourages hotel chains in the regions with higher demand to invest on environmental quality.
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Copyright (c) 2008 Creative Commons Attribution 4.0 International (CC BY 4.0)
This work is licensed under a Creative Commons Attribution 4.0 International License.