Market-driven bioeconomic general equilibrium impacts of tourism on resource-dependent local economies: A case from the western Philippines

Tourism is frequently promoted as a strategy for sustainable economic development in developing countries. However, the preferred methodology for empirically assessing tourism's economic impacts on local economies, applied computable general equilibrium (CGE) modeling, does not account for how tourism affects local natural resource stocks upon which many households depend. We develop a bioeconomic local CGE model to show how market-driven impacts of tourism expansion affect natural resource availability over time. We then show how changes in resource availability affect local incomes of different socioeconomic groups. We parameterize our model with household, business, and tourist survey data from a municipality in the Philippines. We find that tourism expansion increases local real incomes in the short run, but this causes a decline in a local open-access natural resource that erodes real incomes over time, particularly for households engaged in the natural resource sector. Different market integration contexts, as expressed through trade linkages, can mitigate natural resource decline, but this reduces the overall local economic benefit of tourism.