Tourism impact modeling for resource extraction regions

A simple two sector and two factor general equilibrium model is developed to study the interactions among tourism, other economic sectors, and the environment. Tourism is considered an endogenous activity and modeled as a function of prices and environmental damage. Two types of the latter functions are considered. It is assumed that the damage occurs from activities related to the resource sector and that activities from both the resource and the composite tourism sector affect the environment. Simulation results suggest that impacts of policy changes differ with the type of environmental damage function but that the integration of environmental linkages into economic impacts models may reveal significant differences in results.