Some Simple Economics of Eco - Tourism ∗ NZ

This presentation will discuss a couple of arguments concerning public policy towards the management of tourism driven by natural attractions. Such attractions are public assets, but are priced at zero for private entrepreneurs for whom they are an essential input. The first argument I will address is that this is economically inefficient. Second, while price discrimination between domestic and foreign users of natural assets is economically desirable, in NZ there are severe restrictions on the uses of any prices at all. Nevertheless, there are certain policy options available, in terms of controlling the quality of tourism facilities, which a regulator can use to improve national welfare and address the commonly-expressed view that tourist pressure on natural resources leads to excessive congestion.