Environmental economics as a framework to study the tourism phenomenon

This chapter reviews the theoretical underpinnings of environmental economics, as well as the major methods by which to apply the theory in the context of the tourism phenomenon. The overview begins with the concepts of market failure and externalities, and the three competing policy approaches to address them. The conceptual review also introduces the components of total economic value and the related ecosystem services framework. Dynamic approaches where time is explicitly considered such as bioeconomics and dynamic optimization are briefly discussed. Finally, the review provides a brief overview of environmental economics methods that can be applied to the study of tourism. Non-market valuation techniques including revealed and stated preference are described, followed by market approaches. Empirical applications of bioeconomics, optimization, and policy models are presented.