Tourism, economic development, and land use change

Tourism is of great economic importance in many countries but its net economic and environmental benefits are theoretically ambiguous. This paper empirically studies how tourism has affected economic development and land use changes in Brazil, both locally and at the aggregate level. We combine an empirical econometric analysis with a quantitative spatial model, utilizing a granular and rich dataset that includes satellite imagery, individual-level census micro-data, tourism data at the level of individual establishments, and deforestation data, among other sources. Our findings indicate that tourism has substantially increased employment in tourism-related industries and raised local wages, with benefits spilling over into other industries and nearby locations. Furthermore, preliminary evidence suggests that tourism-led development has reduced deforestation in Brazil relative to alternative development pathways.