Market Complimentarities, Rent Extraction and Taxing of Foreign Tourists: A Model of Optimal Tourism Taxes

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Divisekera, Sarath (2002) Market Complimentarities, Rent Extraction and Taxing of Foreign Tourists: A Model of Optimal Tourism Taxes. In: Ten years of tourism research : CAUTHE conference proceedings from 1993 to 2002. Carlsen, Jack, ed. Council for Australian University Tourism and Hospitality Education, Lismore, W.A., pp. 1-12.

Abstract

This paper examines the issue of taxing foreign tourists. In the spirit of conventional optimal intervention theory, a model of optimal pricing is developed by incorporating interdependencies of demand for international tourism with its counterpart international travel. The results suggest that if one ignores the interdependencies of the two sectors and prevailing market structures, the resulting pricing policies may not necessarily be optimal. Pricing strategies that ignore these interdependencies could lead to disastrous consequences.

Item type Book Section
URI https://vuir.vu.edu.au/id/eprint/21919
ISBN 1876685344
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > FOR Classification > 1506 Tourism
Historical > Faculty/School/Research Centre/Department > School of International Business
Keywords taxing foreign tourists, tourism services, tourism attributes, world tourism industry, optimum tariff, service export, government revenue, national gains, foreign exchange earnings, policy formulation, rent maximising taxes, tourism trade
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