Abstract
The aim of this chapter is to examine the way theoretical and empirical literature has looked at the effect of tourism on housing markets in resort destinations. We note that while research on tourism recognizes the effects of recreation activities on local land and housing markets, studies focusing specifically on this issue are very limited. For the purposes of the present work, we first identify the various actors/participants in housing markets and explain how they interact in the context of tourism destinations. Then, we focus on two core strands of relevant research: first, we examine the hedonic price method, as a mechanism to explore how tourism-related amenities can be “quantified” and developed into one of the variables that affect directly and indirectly (through quality-of-life considerations) house price formation in tourism destinations. In the same context, with the use of a case study, we also review an alternative way to quantify the effects of tourism, through the creation of a composite tourism index that enters directly into the house price estimation function. Second, we look at the growing literature on holiday homes and examine how demand for this type of accommodation in tourism destinations can affect the functioning of local housing markets. In this context, we examine issues of housing affordability in tourism destinations, the role of the supply side, but also the policy challenges and responses, suggested in the relevant literature.
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Notes
- 1.
In equilibrium, the willingness to pay and the willingness to accept compensation are equal to the implicit price of each characteristic.
- 2.
In the nonparametric approach, no functional relationship is assumed between the dependent variable (housing price) and the independent variables (structural, environmental, and qualitative characteristics). For a more thorough discussion of nonparametric or semi-parametric approaches see Sheppard (1999).
- 3.
- 4.
Tourism has been extensively approached as a heterogeneous good in the Lancastrian sense (Rugg 1973; Morley 1992; Papatheodorou 2001; Seddighi and Theocharous 2002). The empirical research in tourism uses HPM to investigate two main topics: to analyze the impact on the final price of characteristics of packages holidays (Sinclair et al. 1990; Clewer et al. 1992; Taylor 1995; Papatheodorou 2001; Mangion et al. 2005; Thrane 2005); and to investigate the implicit price of amenities either on the price of tourism accommodation (hotels, holiday cottages, apartments, guesthouse), or on the house prices in resort locations.
- 5.
- 6.
On the contrary, Mollard et al. (2007) in a study based on the 1,529 rents of cottages (weekly rate in peak season) in southern France in 2002 find that forestland has a positive effect on rents.
- 7.
Smith and Palmquist (1994) focus on the willingness to pay for coastal amenities in different tourist seasons (peak, pre-peak, and post peak) and how this affects weekly rents of holiday cottages and apartments supplied by property management firms.
- 8.
See Lambiri et al. (2007) for an extensive review of hedonic studies looking at the effects of QOL considerations on house prices.
- 9.
They quote the work of Wilman and Krutilla (1980) as one of the first study that uses HPM to analyze beach quality and property values.
- 10.
Sardinia is the second main island of Italy with a surface of 24,089 square km. (7.9% of the national surface) and a coastline of 1,731 km. Its population was 1,651,888 in 1999 (2.8% of the Italian population). Fifty percent of the population lives in the province of Cagliari (located in the South), in which is located also the Capital of the Region. Sardinia relies upon five ports (Arbatax, Cagliari, Golfo Aranci, and Olbia) and three airports (Alghero, Cagliari, and Olbia). The tourism industry in Sardinia starts developing in the 1960s thanks to the presence of high quality marine amenities. Since the beginning, the northern part of the region has been the strongest attraction pole for tourists (particularly the town of Alghero and the so called Costa Smeralda close to the town of Olbia). Nowadays, 50% of tourist demand and 50% of all tourist beds are concentrated in the northern part of the island (hotels, camp sites, and tourist villages).
- 11.
- 12.
The role of Alghero as a top tourist destination is well known in Italy. In the 1950s, Alghero was also selected as the location of the first tourist association of Sardinia and the first Local Tourist Institution (Biagi and Contu 2002). Alghero has been also the first area in the Island to be promoted by an international tour operator in 1954: the Horizon Holidays.
- 13.
The two indexes show a significant degree of correlation: the Pearson correlation between the two indexes is 0.509, significant at the 0.01 level (two-tailed).
- 14.
The data were made available by CRiMM, (Research Center of the Engineering Department of the University of Cagliari, Italy).
- 15.
While it was positive in a standard OLS.
- 16.
BMW stands for Borders with Northern Ireland, Midlands, and the West.
- 17.
Similarly, in the context of the USA, Di et al. (2001) discuss how the share of second homes in the total housing stock of individual US counties results in differential impacts upon various housing markets.
- 18.
In such cases, Paris notes that “there is a clear causal relationship between the growth of second home ownership and problems of affordability for lower-income households and first-time buyers.”
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Biagi, B., Lambiri, D., Faggian, A. (2012). The Effect of Tourism on the Housing Market. In: Uysal, M., Perdue, R., Sirgy, M. (eds) Handbook of Tourism and Quality-of-Life Research. International Handbooks of Quality-of-Life. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2288-0_36
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