Taxing tourism and subsidizing non-tourism: A welfare-enhancing solution to “Dutch disease”?

Using a combined analysis of a general equilibrium and a partial equilibrium, this study models the impacts of a combined policy tool based on taxing tourism and subsidizing non-tourism in a tourism-dependent destination. The results suggest that such a policy tool, while widely discussed in economics literature, may not be suitable for a tourism destination, as it might have adverse effects on local welfare.