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ECT- Article Assignment 1'Congestion in popular tourist areas: a multi-
attribute experimental choice analysis of
willingness-to-wait in Amsterdam'
1.In the article 'Congestion in popular tourist areas: a multi-attribute experimental
choice analysis of willingness-to-wait in Amsterdam' congestion in cultural destinations is
seen as an externality of consumption in tourism / leisure. Explain in your own words,
using arguments from the book and the lecture, why congestion at cultural attractions
can be described as an externality. In Chapter 11 of the book 'negotiations' and 'legal
remedies' are presented as solutions for externalities. Explain if and how these solutions
can be used to solve this externality.
Congestion at cultural attractions is a main issues for the cities and can be described as
an externality. An externality is a cost or benefit of activities that accrue to people who
are not directly involved in those activities. There are two kind of externalities: positive
externalities and negative externalities. Negative externalities are also known as external
cost, which means that a cost on an activity falls on people other than those who
purchase the activity. Positive externalities are also known as extra benefits, which
means that a benefit on an activity is received by people other than those who purchase
the activity.
In the article is stated that “environmental and cultural emancipation have been
important stimuli for the age of mass tourism in which rising tourist flows to places of
environmental and cultural interest can be observed, even though the related spatial
mobility and tourist pressure have caused significant global and local externalities.”
(Tourism economics, page 26). Cultural and ecological tourism is an important form of
tourism which is expected to grow highest in the future. Congestion at cultural attractions
will be a negative externality, because, as in the article is stated “congestion in cultural
destinations”, page 29, it can cause major reduction of visitor’s enjoyment and
appreciation of the site. It may also bring adverse impacts on conservation programmes
for historical site and it can lead to pollution of the area due to congestion of transport.
Legal remedies and negotiations can be used as solutions for externalities because when
all affected parties by externalities can negotiate with no cost, the invisible hand of the
market will produce an efficient allocation of resources. In this way parties can
compensate others for taking remedial action. However, negotiating is often impractical,
because self-serving actions of individuals will not lead to an efficient outcome. There
needs to be collective action. The collective actions sometimes take the form of laws and
government regulations that alter the incentives.
2. The article concludes that different types of visitors of cultural attractions differ in their
willingness-to-wait. Explain how information about willingness-to-wait of different types
of visitors can be used to develop an effective strategy to manage congestion in cultural
destinations. In your answer, refer to the 'hurdle method' as described in Chapter 8 of the
book.
In the article is stated that “tourism congestion means loss of time and may assume
different forms ( for instance waiting in a queue to enter a tourist facility, long waiting
time to be served, high density of tourists leading), different types (such as permanent
congestion, fluctuating congestion) and different effects (for example disturbance to local
residents, rise in pollution or noise). The Willingness-To-Wait concept takes for granted
that the prevalence of the demand side of the tourist market and aims to assess the
willingness of tourists to wait before a certain tourist service. The WTW concept is a new
idea in experimental choice analysis and refers to the maximum waiting time visitors
would find acceptable to enjoy a certain tourist facility or dedicated trip in the city.
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