Abstract
The ‘sustainability’ debate strongly suggests that the viability of ecotourism is in danger unless policies which promote the natural resource base are pursued. This paper considers the sustainability of ecotourism in the particular context of wildlife amenities, using dynamic analysis. It is well known that in the presence of externalities the competitive market equilibrium is suboptimal. Static and dynamic optimal tax policies are derived which are designed to decentralize the social optimum; thereby internalizing the externalities and guaranteeing the sustainability of both the wildlife species and tourism. In particular, the dynamic policy suggests that park authorities should increase taxes as the wildlife stock increases.
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