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Estimating Tourism Effects on Residents: A Choice Modelling Approach to the Case of Rimini

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Notes

  1. 1.

    The most important benefits include the generation of jobs and new business opportunities, the increase in the number and types of facilities, of recreational and entertainment opportunities available to residents, and the spread of new ideas into the community. On the other hand, the costs are mainly stemming from the increase in crime, noise level, pollution, degree of congestion, and to the negative impact on local culture. Pizam and Milman (1984) identified occupational, cultural, demographic impacts, mutation of consumption patterns, transformation of norms, impact on the environment. Similarly, Pearce (1989) indicated six classes of social and cultural effects, while Travis (1984) listed socio-cultural costs and benefits that may affect tourism destinations.

  2. 2.

    Among the many papers that in tourism economics recently used this methodology, we mention Apostolakis and Shabbar (2005), Brau and Cao (2006), Breffle and Morey (2000), Crouch and Louviere (2004), Huybers and Bennett (2000), Huybers (2005), Morey et al. (2002) and Papatheodorou (2001).

  3. 3.

    Preferences of residents might change accordingly to whether they work or not in the tourism sector.

  4. 4.

    Recent papers on tourist preferences in Rimini are Candela et al. (2007), Figini and Troia (2006), Orsingher (2004), and Scorcu and Vici (2008).

  5. 5.

    For an overview of the main differences among alternative stated preferences methodologies, particularly with respect to contingent valuation, see Brau (2007) and, more extensively, Bateman et al. (2002), Bennett and Blamey (2001), Louviere et al. (2000), and Mazzanti (2003).

  6. 6.

    Lancaster's hedonic theory (1966, 1971), which states that goods are not demanded per se, but for their elementary characteristics, can be considered the theoretical foundation of discrete choice models.

  7. 7.

    The IID assumption entails the property of independence of irrelevant alternative (IIA – McFadden, 1984). Violations of the IIA assumption may arise when some alternatives are qualitatively similar to others or when there are heterogeneous preferences among respondents (Bateman et al., 2002; Morrison et al., 1996). If IIA is violated, alternative choice models should be used, such as the nested logit model (Louviere et al., 2000) or the multinomial probit model (Hausman and Wise, 1978).

  8. 8.

    The scale factor μ is inversely proportional to the standard deviation of the error distribution. Assuming μ equal to 1 implies a constant error variance.

  9. 9.

    When the attribute is expressed in monetary terms, this trade-off σ is an “implicit price”. These estimates rely on the assumption that the marginal utility of income is constant.: this holds only when small changes are considered (involving a tiny share of total individual income).

  10. 10.

    The identification of the six attributes and their levels was the result of frequent research meetings; a pilot test was carried out in the weeks preceding the survey and proved very useful to check the comprehension of the attributes, the clear perception of the difference in levels, and the relevance to residents of alternative scenarios. The pilot test confirmed as well that the structure of the survey was such to raise some expectation about the use of the information provided for decision making purposes. In fact, if the respondents view the process as entirely hypothetical, then their responses do not convey any economic sense (Carson, 2000).

  11. 11.

    The attributes and their respective levels were very similar to the ones submitted to tourists in a parallel inquiry (Brau et al., 2008). Although some differences exist, particularly on the monetary and the cultural attributes, this allowed us to compare, at least partially, the elicited preferences of tourists and residents over the shared territory of Rimini.

  12. 12.

    In choosing the levels of the monetary attribute, we had to balance four features: i) the levels should be in line with the projects involved, once alternative (and realistic) sources of financing (sponsorship, private co-financing, state intervention) were considered; ii) they should be expressed in an easy metric; iii) ideally they should span over the distribution of people’s willingness to pay; iv) finally, we had to overcome the fact that in Italy the local administrations do not have the possibility to raise taxes dedicated to finance local projects (taxes are mainly transfers from the state).

  13. 13.

    Zwerina et al. (1996) introduce four principles that a choice design should jointly satisfy in order to convey efficient estimates. Bunch et al. (1996), in evaluating generic choice designs, show that shifted designs generally have superior efficiency compared with other strategies, although for most combinations of attributes, levels, alternatives and parameters it is impossible to create a design that satisfies the four principles (Kessels et al., 2006).

  14. 14.

    The pilot test showed that respondents could cope with up to eight choice pairs each. In fact, violations related to instability of preferences can arise from learning and fatigue effects (Hanley et al., 2002). In order to make clear and homogeneous the comprehension of attributes and to facilitate the individual decision process, the oral explanation of these attributes and levels was accompanied by the presentation of drawings and photos describing each scenario. In each group, the cards submitted were the same but presented every time with a different sequence, in order to avoid any question order bias.

  15. 15.

    The explicit definition of the status quo allows for a more coherent evaluation of the proposed scenarios (Brau, 2007). In our case, only 7% of the stated preferences were not confirmed after the comparison with the status quo. On the use of consequentiality design in stated preference models see Boxall and Adamowicz (2002) Carson et al. (2002), Cummings and Taylor (1998), Landry and List (2007), Provencher et al. (2002), Train (1998).

  16. 16.

    The questionnaire is available from the authors upon request.

  17. 17.

    There are two main reasons why data on economic activity are likely to underestimate the importance of tourism. First, many non-tourism activities in a city like Rimini might primarily serve tourists (let us think about a shop situated close to the beach); second, property letting might be an important source of income which does not stem from the respondent’s main economic activity. In this respect, 15% of the sample declared that to have an apartment to rent, of which 2.5% rents only to tourists, 6.1% rents also to tourists while 6.4% does not rent at all to tourists.

  18. 18.

    Among people whose business was related to tourism, 78.5% thought that it has a positive effect, 8.2% no effect and 13.3% a negative effect. Among people whose business was not related to tourism this distribution changed to 59.2% (positive effect), 18% (no effect) and 22.8% (negative effect).

  19. 19.

    We inserted an alternative-specific constant (ASC) to capture those characteristics of the choice not included otherwise in the model. In our case, there might be a tendency of individuals to prefer any scenario labelled “A” (on the left of the card presented) over any other scenario labelled “B” (on the right of the card). This is a frequent finding in such models (Louviere et al., 2000), and the inclusion of the alternative-specific constant allows to effectively control for this behaviour.

  20. 20.

    The temporary preservation of the beach's coefficient has a negative sign, significant at the 10% level only in the whole sample.

  21. 21.

    An alternative way to include preference heterogeneity consists of using the mixed logit model (Train, 2003). However, such approach requires important assumptions on the form of distribution of the random parameters. If the distributional form is misspecified the estimates are not consistent.

  22. 22.

    Even if the pilot test confirmed that permanent and temporary preservations of the beach were perceived as different environments by residents, their choices were not significantly affected by different environmental policies.

  23. 23.

    The only statistically significant interaction concerned residents whose business is linked to tourism, and the coefficient confirmed that they do not appreciate a pedestrianisation of the seaside avenue. However, we tested the joint hypothesis that all the interactions of the extended model were not statistically significant with respect to the basic model of Table 9.4. We accepted the null hypothesis that all the coefficients of the additional interaction terms were identically equal to zero (χ2(18) = 13.10 with a p-value = 0.7857). Complete results are available from the authors upon requests. See also Figini et al. (2007).

  24. 24.

    Note that we are dealing with discrete (and not marginal) level variations and that estimates are based on the assumption that the marginal utility of income is constant.

  25. 25.

    The probability that an individual picked each scenario out of the four alternatives was computed by inserting in Eq. (9.2) the coefficient estimated in Tables 9.4 and 9.5.

  26. 26.

    It must be recalled that the twin study on tourists slightly differed in the definition and in the levels of the cultural and monetary attributes. For this reason, such attributes were not considered in the simulation, and this might affect the estimated probabilities.

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Authors and Affiliations

  1. Department of Economics, University of Bologna, Bologna, Italy

    Paolo Figini, Massimiliano Castellani & Laura Vici

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  1. Paolo Figini
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  2. Massimiliano Castellani
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  3. Laura Vici
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Correspondence to Paolo Figini .

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Editors and Affiliations

  1. Depto. Turismo, Universidade Lusíada de Lisboa, Rua da Junqueira 188-198, Lisboa, 1349-001, Portugal

    Álvaro Matias

  2. Dept. Spatial Economics, Free University, De Boelelaan 1105, Amsterdam, 1081 HV, Netherlands

    Peter Nijkamp

  3. Depto. Turismo, Universidade Lusíada de Lisboa, Rua da Junqueira 188-198, Lisboa, 1349-001, Portugal

    Manuela Sarmento

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Figini, P., Castellani, M., Vici, L. (2009). Estimating Tourism Effects on Residents: A Choice Modelling Approach to the Case of Rimini. In: Matias, Á., Nijkamp, P., Sarmento, M. (eds) Advances in Tourism Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-2124-6_9

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