The income elasticity gap and its implications for economic growth and tourism development:The Balearic vs the Canary Islands

The Balearic and the Canary Islands are two well-known tourism-led economies. They both experienced a tourism boom during the same decades, and, hence, they developed a similar productive-mix. Nevertheless, there are strong economic differences between the two regions. While the Balearic Islands enjoy a high GDP per capita, the Canary Islands show a more modest performance. The results of a panel data regression confirm our hypothesis that they differ substantially in terms of income elasticity of tourism. It is two times higher in the Balearic Islands than in the Canaries, which indicates the first is perceived as a more luxurious destination. Furthermore, the results of a dynamic computable general equilibrium model show that the Canaries would converge in GDP per capita with the Balearic Islands if they attracted tourists with a similar profile as the latte

Understanding tourists´ economizing strategies during the global economic crisis

This paper explores how tourists from 165 regions of EU-27 countries cut back their tourism expenditure during the global economic crisis in 2009. This study disentangles the cutback tourism expenditure in two mutually related decisions: First, it takes into account whether the tourist has had to cut back on tourism expenditure due to the crisis and second, how they decided to cut back according to six alternatives: “fewer holidays”, “reduced length of stay”, “cheaper means of transport”, “cheaper accommodation”, “travel closer to home” or “change the period of travel”. The econometric model able to deal with such simultaneous decisions is an adaptation of the Heckman model in generalized structural equations modeling. This methodology permits to control by sample selection bias and correlations between equations. This paper highlights the existence of patterns in the cut back alternatives depending on the socioeconomic characteristics of the household and the climate conditions in origin.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Explaining success and failures in PPP transport projects: an econometric approach

There are a multitude of factors, both internal and external, that may affect the development and success of any transport project. ‘Success’ is both context-dependent and quite difficult to measure. This paper distinguishes between four types of ‘success’ variables: (lack of) cost overruns; (lack of) time delays; (ex-post) level of traffic; and (generated) revenues. Each variable is modeled in a binary way (using discrete choice models), with each model estimating the relevance of various explanatory factors on the probability of success. Internal factors are found to have the greatest effect on that probability, and PPP projects seem to be prone to budget overruns and delays. Governance factors, such as the tender process, renegotiations, and issues related to penalties, among others, can all produce complications. Since the public authority has control over most of these variables, these results could be used to improve the ‘success’ of these projects