V AERNA CONFERENCEFARO, 31 MAY - 2 JUNE 2012

TOURISM GROWTH AND WASTE DISPOSAL GENERATION: AN IPAT-TYPE MODEL FOR MALLORCA BASED ON STOCHASTIC DIFFERENTIAL EQUATIONS

By

Italo Arbulú

Javier Lozano

Javier Rey-Maquieira

UNIVERSITY OF BALEARIC ISLANDS - UIB

June, 1ST 2012

1

INTRODUCTION

Tourism is an industry with product based on environmental consumption, both natural and man-made.

Continued growth in tourism has led many nations, as well as tourism businesses, to recognize the need to conserve precious tourism resources in order to keep on growing trends and to spread the benefits of tourism activities: SUSTAINABLE TOURISM

Tourism industry has especial features in production because the consumption of the “tourism product” is made at the destination. Therefore tourism growth is related to increases in tourist arrivals which are equal to have a nomad population in the destination.

2

INTRODUCTION

Every population, nomad or local has a pattern of consumption that without any doubt generates a waste flow that finally should be treated in order to keep environmental quality of the destination which is an asset of the tourist sector.

However, waste disposal collection and treatment that avoids (or at least reduces) environmental impacts on local landscape involve a cost that is usually paid by local population which could be considered as an externality generated by the sector.

The main objective of this paper is to assess the environmental impact of tourism growth on waste disposal generation by means of an IPAT-type Model Based on Stochastic Differential Equations for a mature tourist destination as Mallorca.

3

WHAT IS NEW ABOUT THIS STUDY?

Analysis of the impact of population growth on environment (mainly CO2 or other GHG emissions).

Attention on the performance of two populations: nomad (tourist) and local on waste disposal generation

Usually related to industrialized economies performance

Usually related to industrialized economies performance

Focus on a non-industrialized (tourist) economy

Focus on a non-industrialized (tourist) economy

4

THE THEORETICAL MODEL

THE IPAT MODEL

 

“I” denotes the environmental impact “P” represents the population size, “A” stands for affluence, “T” for the state of technology applied

However, this formulation is an identity rather than a model itself. Dietz and Rosa (1994, 1997) proposed a different formulation called

STIRPAT (“Stochastic Impacts by Regression on Population, Affluence and Technology”).

This formulation keeps the ecological foundation and multiplicative logic of IPAT, however reformulates it by allowing for the estimation that the net effect of each anthropogenic driver on the environmental impact should not be equal.

5

TAPI **

THE THEORETICAL MODEL

We start our analysis by

if take the derivative with respect to time, it holds that:

This previous expression can be written in terms of growth rates:

6

tT ;tA ;tPfI

T(t) t)T/(

* T/T)(I/I)(

+ A(t)

t)/A( *

A/A)(I/I)(

+ P(t)

t)P/( *

P/P)(I/I)(

= I(t)

t)I/(

T(t)T(t)

+ A(t)A(t)

+ P(t)P(t)

= I(t)I(t)

= I(t)

t)I/(.

T)(I,

.

A)(I,

.

P)(I,

.

THE THEORETICAL MODEL

Furthermore, it is also possible to decompose the variables A and T as:

&

Where “E” denotes expenditure (instead of GDP). We can rewrite as:

7

PE

=AEI

=T

E(t)E(t)

) -(1

) -(+

P(t)P(t)

) -(1

) -( =

I(t)I(t)

.

T)(I,

T)(I,A)(I,

.

T)(I,

A)(I,P)(I,

.

THE THEORETICAL MODEL

As Zagheni and Billari (2007) argued, this previous equation may be expressed in stochastic terms. However, if we consider the possibility that population and income growth rates do not evolve in a deterministically way, we can rewrite the initial equation as a system of three stochastic differential equations

8

tt4

tt3

t

.

2

.

1

dt E +dt E =dE

dt P +dt P =dP

dt I dt I E(t)E(t)

+ P(t)P(t)

dI

LOCAL +

TOURIST

METHODOLOGY

BASIC MODEL

Enables the estimation of the IPAT in its traditional form without considering the presence of stochastic regressors.

Enables the estimation of the IPAT in its traditional form without considering the presence of stochastic regressors.

EXTENDED MODEL Nº 1

EXTENDED MODEL Nº 2

Basic STIRPAT formulation but only one explanatory variable (Population) should be considered as stochastic

Basic STIRPAT formulation but only one explanatory variable (Population) should be considered as stochastic

STIRPAT that includes the possibility of treat all explanatory variables in the IPAT model as stochastic regressors.

STIRPAT that includes the possibility of treat all explanatory variables in the IPAT model as stochastic regressors.

9

VARIABLES & SAMPLE10

VARIABLE DESCRIPTION SOURCE

RSUUrban solid wasted disposal generated in Mallorca(measured in Kg.) without including the recycled disposals.

TIRME S.A.

IPH_MALLHuman Presure Index for Mallorca Island: This indicatormeasures the demographic burden daily borne (in number of persons) by each one of the islands of the Balearic Islands.

IBESTAT

POB_MALLLocal population in Mallorca: Includes the number ofdefuntions, births and registered migration

IBESTAT

GAST_TUR Tourist expenditure in Mallorca (in Euros) EGATUR

GAST_LOCALLocal expenditure in Mallorca (in Euros) - Monthlyestimation according to quarterly data from (EPF).

INE / IBESTAT

Solid waste disposal generate in Mallorca between the years 2004 and 2010

POP.POP.

EXP.EXP.

RESULTS11

COEFFICIENTSBASIC MODEL

STOCHASTIC MODEL N° 1

STOCHASTIC MODEL N° 2

POPULATION GROWTH 2.993453 * 3.193025 * 2.832025 *(12.44235) (11.78547) (8.438347)

EXPENDITURE GROWTH 0.091984 ** 0.058514 0.16241 **(2.037676) (1.152927) (2.027464)

Note: Values in parenthesis are related to t-statistic* Significance at 1%** Significance at 5%

ELASTICITYBASIC MODEL

STOCHASTIC MODEL N° 1

STOCHASTIC MODEL N° 2

POPULATION 2.215 2.407 2.024AFFLUENCE 0.252 0.224 0.310TECHNOLOGY 0.176 0.176 0.176

Alfranca

(2009)

RESULTS12

CONCLUSIONS

As worldwide environmental quality degenerates over time, the academic literature related to sustainable development have increase considerably. However, even though tourist sector gained importance as an economic activity, little attention has been paid on its link with one of the main results of this activity: urban solid waste disposal generation.

The main contribution of this research is related to the inclusion of the idea of nomad population (tourist) into the STIRPAT model which attempt to measure the importance of population growth on environmental outcome (urban solid waste).

The final model selected (STOCHASTIC MODEL Nº 2) was considered as the most appropriate to explain the IPAT theory though the STIRPAT formulation, since it corrected the problem of stochastic explanatory variables.

13

CONCLUSIONS

It is interesting to highlight that the results also showed that mature tourist destinations tend to have higher population elasticity than industrial populations tested in previous STIRPAT models, the causes of this mature tourist destination characteristic should be analyzed in future researches.

Furthermore, the estimations also showed the potential relevance of improvement in environmental outcome without harming tourist receipts, by the elasticity of substitution (trade-off) between low income tourist arrivals and higher income tourists until a threshold of 6.55.

Therefore the STIRPAT model can help public authorities to understand the relationship between tourist growth and waste disposal generation and contribute to policy making in mature tourist destinations.

14

V AERNA CONFERENCEFARO, 31 MAY - 2 JUNE 2012

TOURISM GROWTH AND WASTE DISPOSAL GENERATION: AN IPAT-TYPE MODEL FOR MALLORCA BASED ON STOCHASTIC DIFFERENTIAL EQUATIONS

By

Italo Arbulú

Javier Lozano

Javier Rey-Maquieira

UNIVERSITY OF BALEARIC ISLANDS - UIB

June, 1ST 2012

15