A New Economic Framework for Tourism Decision Making

Abstract

In this article it is argued that the conventional approach of conducting either a micro- or macro-economic analysis in tourism is incongruent with emerging concerns of the modern tourism system which require economic analysis that explicitly considers community as a unit of analysis. This article thus proposes an ecological economics framework for analyzing economic decision making in tourism. This approach assumes that tourism brings costs and benefits to a society with differential effects. Communities are proximate to the benefits or costs of tourism, including externalities or negative impacts which are often associated with tourism growth. Extensions of micro economic models are proposed as an alternative framework for addressing dynamic decision making and tradeoffs in resource use. This is consistent with evolving trends in tourism demand for sustainable products or destinations, and provides important insights into the inherent tradeoffs that tourism stakeholders may need to make in the post modern ‘triple bottom line accounting’ tourism industry.