Fire takes no vacation: Impact of fires on tourism

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 annual costs to the Portuguese economy due to the impact of burned areas in 2030 range between €17.03 and 24.18 million for domestic tourist arrivals and between €18.26 and 38.08 million 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.

WITH

Vladimir Otrachshenko, Justus Liebig University Giessen: Giessen, Hessen, DE

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About Author(s)

Luís Catela Nunes

Nova Faculty Affiliate

Luís Catela Nunes is a Professor of Applied Econometrics at Nova School of Business and Economics. He received his PhD from the University of Illinois at Urbana-Champaign. (...)