The potential implications of environmental deterioration on business and non-business visitor expenditures in a natural setting: A case study of Australia's Great Barrier Reef. (June 2016)

• Record Type: Journal Article
• Authors: Mustika, Putu Liza Kusuma; Stoeckl, Natalie; Farr, Marina
• Is Part Of: Tourism economics. Volume 22:Number 3(2016)
• Page Start: 484
• Page End: 504
• Publication Date: 2016-06
• Subjects: business and non-business visitors -- environmental degradation -- Great Barrier Reef -- hypothetical response bias -- visitor expenditure; Tourism -- Periodicals; 338.4791
• DOI: 10.5367/te.2014.0433
• Languages: English
• ISSNs: 1354-8166

Abstract

Nature-based tourism can be an important source of income for regional economies but relies on a healthy environment. Using data collected from business and non-business visitors to Australia's coast adjacent to the Great Barrier Reef, the authors generate estimates of the potential financial impact of environmental degradation, demonstrating a novel way of testing and controlling for hypothetical response bias. More than 90% of non-business visitors and 67% of business visitors came to the region for at least one nature-related reason. Average daily expenditure was similar for both visitor segments (≈AUD$190), but the determinants of expenditure varied. All visitors reacted much more negatively to the prospect of environmental degradation than to a 20% increase in (local) prices, although business visitors were much less responsive than non-business visitors. Adjusting for hypothetical response bias, the authors estimate that substantial environmental degradation could reduce visitor expenditures (and thus local tourism incomes) by at least 17%.