The Economics of Local Tourist Systems

24 Pages Posted: 29 Nov 2005

See all articles by Guido Candela

Guido Candela

University of Bologna - Department of Economics

Paolo Figini

University of Bologna - Department of Economics; University of Bologna - CAST - Centre for Advanced Studies in Tourism

Antonello E. Scorcu

University of Bologna - Department of Economics

Date Written: November 2005

Abstract

In this paper we analyse the Local Tourist System (LTS) as a particular case of Marshallian Industrial District. The LTS allows the identification of more effective policy tools for managing tourism. First, through the concept of LTS, the policy maker can take into account the complexity of tourism, characterised by a strong heterogeneity of goods, services and subjects involved; second, LTS helps promote a stronger co-ordination between the public and the private sector, by identifying a homogeneous territory and recognising its importance in tourists' decisions; third, through the LTS the policymaker can analyze the externalities and promotes the idea of collaborating networks in a context of local development. In the LTS framework, the anticommon problem can be analysed and contrasted. As the tourist has to buy different but intertwined goods which compose the holiday package, the failure in one of the markets can lead to the overall failure of the package. A LTS policy has to: i) co-ordinate the price policy of the different firms supplying "single components" of the tourist product; ii) fix the price of the whole product; iii) impute a price to each component. We demonstrate that, through price policy co-ordination and under general conditions, the LTS can increase the size of tourism and the firms' profits, thereby reaching a more effective and efficient target in tourism policy. The recent introduction of LTS in the Italian legislation can be seen as a positive attempt of improving co-ordination in a complex sector such as tourism.

Keywords: Local tourist systems, Tourism policy

JEL Classification: L83, Q26

Suggested Citation

Candela, Guido and Figini, Paolo and Scorcu, Antonello, The Economics of Local Tourist Systems (November 2005). FEEM Working Paper No. 138.05, Available at SSRN: https://ssrn.com/abstract=855965 or http://dx.doi.org/10.2139/ssrn.855965

Guido Candela (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 0541 434118-9 (Phone)
+39 0541 434120 (Fax)

Paolo Figini

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

HOME PAGE: http://www2.dse.unibo.it/dsa/profile.php?id=33

University of Bologna - CAST - Centre for Advanced Studies in Tourism ( email )

Via AngherĂ  22
Rimini, RN 47922
Italy

Antonello Scorcu

University of Bologna - Department of Economics ( email )

I-40126 Bologna
Italy

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