Climate change can either positively or negatively impact on the attractiveness of a destination. To evaluate the potential effects of these changes for Caribbean destinations, a cross-country tourism demand model is augmented with relative tourism climatic indices to examine the importance of an island's climatic features. The model is estimated using a dynamic panel approach and monthly observations over the period . Combining the scenarios for future climatic conditions as well as the coefficient estimates obtained, anticipated scenarios of the direct effects of climate change on tourist arrivals to the region are provided. In addition, merging this data with estimates of average visitor expenditure gives a dollar estimate of the impact on the tourism industry and the overall economy.
Remittances have been rising fairly rapidly around the world and are the fastest growing source of foreign exchange earnings for developing countries. The empirical literature suggests that remittances can have both positive and negative influences on the growth and development of receiving states. However, the literature has been largely silent on the potential effects that these flows can have on economic volatility in the receiving country. This paper evaluates the impact of remittance flows on economic volatility in a panel of 95 countries over the period 1970 to 2005. The study reports that remittances can play a key role in mitigating the effect of adverse output shocks but exert no significant influence on consumption and investment volatility. Moreover, important differential impacts exist across the various county groupings.JEL Classification: F240; E320; P500
Purpose -Since the decline of export agriculture and the loss of trade preferences, most Caribbean countries have shifted their economies towards the provision of tourism services. Barbados, for example, receives more than two-thirds of its foreign exchange earnings from tourism. The sustainability of tourism in the Caribbean can potentially be affected by climate change. This paper aims to address this issue.Design/methodology/approach -This paper provides an assessment of the likely effects of climate change in the small state of Barbados and suggests some recommended adaptations. Climate change is expected to impact on temperature, rainfall and severe weather, sea levels and sea surface temperatures, biodiversity loss, and lead to erosion and seasonal shifts on the island.Findings -The paper finds that, in relation to tourism demand, as travellers from source markets become more conscious of their carbon footprint and the implementation of green taxes, there might be some alteration in demand for long-haul destinations such as Barbados. On the supply-side, increased operating costs, due to higher insurance premiums (particularly for beachfront properties) and greater cooling costs, to name a few could all impact on the profitability of hotels in the island. As climate change impacts on the water table, there is also likely to be some competition for water resources for residential and tourism purposes.Originality/value -The paper supplies useful information on sustainability of tourism in the Caribbean and the effects of climate change.
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