Fire Takes No Vacation: Impact of Fires on Tourism

FEUNL Working Paper Series No. 632

25 Pages Posted: 20 Aug 2019

See all articles by Vladimir Otrachshenko

Vladimir Otrachshenko

New University of Lisbon - Nova School of Business and Economics

Luis C. Nunes

Universidade Nova de Lisboa - Faculdade de Economia

Date Written: July 1, 2019

Abstract

Many Mediterranean-type climates around the world will face increased risks of wildfires as a consequence of climate change. In this study we consider the case of Portugal and estimate the impact of the increasing risk of forest fires on tourism. Using data for 278 municipalities for the 2000-2016 period we find a considerable negative impact of burned areas on the number of tourist arrivals, both domestic and inbound. We go beyond the traditional impact analysis and provide predictions for 2030 and 2050. The estimated costs to the Portuguese economy due to the impact of burned areas in 2030 range between 17.03 and 24.18 million Euros for domestic tourist arrivals and between 18.26 and 38.08 million Euros for inbound ones. In 2050, those costs will increase at least fourfold. These findings underscore the importance of taking the forest fire risks into account when planning local investments.

Keywords: Climate change, Economic Development, Fires, Future Projections, Tourism, Portugal

JEL Classification: L83, O13, Q54, Q56

Suggested Citation

Otrachshenko, Vladimir and Nunes, Luis Catela, Fire Takes No Vacation: Impact of Fires on Tourism (July 1, 2019). FEUNL Working Paper Series No. 632, Available at SSRN: https://ssrn.com/abstract=3438168 or http://dx.doi.org/10.2139/ssrn.3438168

Vladimir Otrachshenko (Contact Author)

New University of Lisbon - Nova School of Business and Economics ( email )

Campus de Campolide
Lisbon, 1099-032
Portugal

Luis Catela Nunes

Universidade Nova de Lisboa - Faculdade de Economia ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal

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