Model Structure

This section describes the model’s structure. The model is descriptive, with causal relationships specified through differential equations. The model comprises five modules, one each for the economy, the tourists and tourist accommodations, the population, the environment, and the government. These modules, the building blocks of the model, interact with one another. Often these modules are studied separately. Figure 8.2 shows the modules with their main variables. In the descrip-tion of the five modules and their interacdescrip-tions, only the most important reladescrip-tion- relation-ships are addressed. There are various indirect linkages between the modules, for instance, between tourism and the population via the economy: the more tourists

Economy Tourism

*Exogenous variable in the model.

Figure 8.2. The general model structure.

visit the peninsula, the more people are needed to work in the tourism industry, which may lead to migration into the tourism region.

The model uses 1995 as a base year and makes computations for each year thereafter until 2015. The initial conditions and the relationships are based on data from various sources on numbers of tourists and rooms (Inskeep and Kallenberger, 1992; World Tourism Organization, 1994; INEGI, 1994); on Mexico’s economy (World Bank, 1994; OECD, 1995); on water use (Gelting, 1995); on the Yucat´an peninsula’s economy (CINVESTAV, 1996); and on demographics (see Chapter 7).

The initial conditions and equations of the model are presented in Appendix 8A.

The Economic Module

The economy as modeled consists of two sectors: the tourism sector (region 1) and the rest of the economy, which is the aggregate of all other sectors (region 2).

Ideally, the economic module would deal with various economic sectors separately to give a more accurate description of the economic system. For practical reasons, however, only the tourism sector is dealt with in detail.

The gross output of the tourism sector depends on the number of tourists, the price per night of accommodation, and the number of nights stayed. A part of the gross output goes toward wages. The wage per worker depends on the occu-pancy rate, intermediate consumption by the tourism sector, gross output, and the number of people working in tourism. The profit of the tourism sector depends on gross output and the occupancy rate of the hotel rooms (see Equations E1–E9 in Appendix 8B).

Total investment is the sum of three types of investment: international invest-ment in the tourism industry, which depends on the profit per room; national in-vestment, which depends on the profit per room; and regional inin-vestment, which depends on the wages and profits in both the tourism and the aggregated sectors.

The regional (Yucat´an) investment depends on the profits and the wages in sec-tors 1 and 2: invyuc=.4*(profit1+profit2)+.1*(wage1+wage2) (see Equation E19 in Appendix 8B). The distribution of the regional investments over the two sectors depends on the change in the profit per room in the preceding year (see Equations E10–E22 in Appendix 8B).

For the aggregated sector, the gross output depends on the labor force, the capi-tal stock, and the price. The gross output of this sector is also divided into purchased intermediate inputs, wages, and profits. The wage per worker is determined by the part of the gross output dedicated to labor and the number of people working in the sector (see Equations E1–E40 in Appendix 8B).

The Tourism Module

Tourism demand depends on the price per room; the quality of water, beaches, and archaeological sites; and exogenous factors (e.g., the general popularity of Mexico, which may depend on marketing strategies or even the political situation in various countries). The exogenous factors are based on the historical growth rate of tourism in the region (INEGI, 1994) The supply of rooms depends on the total availability of rooms and the price per room. When the price is very low, the hotel owners will not supply any rooms, because the costs of opening them are higher than the revenues. When the price is very high, the supply of rooms will be equal to the total number of rooms available. In general, the price equates the demand for rooms to the number that are made available. The number of rooms that are available depends on investment in the tourism sector and the depreciation rate of rooms.

The Population Module

The population is divided according to the peninsula’s two regions. The birth and death rates of both regions are adopted from the forecasts (central scenario) in Chapter 7. An important aspect of growth of tourism in the tourism region is inter-nal migration. The net migration rate for the peninsula depends on the number of tourists that visit. After rewriting Equations D7–D10 in Appendix 8B, the number of migrants to the tourism region (miginVab) depends on the number of tourists, the size of the population, and its natural growth rate: miginVab=2*tourists*.085-(popVab+natgrowth). The more tourists there are, the more jobs will be available, which attracts people to the peninsula, especially to the tourist areas. Internal mi-gration to the tourism region comes partly from the rest of the peninsula and partly

from other parts of Mexico or other countries. Migration to the peninsula is tem-porary, because when there no longer are jobs in the tourism sector, people move away again.

The Environmental Module

This module consists of three broad environmental quality indicators: the quality of water, beaches, and archaeological sites. Water quality depends on the amount of water used, the water’s natural purification rate, and government policies to clean up the water. The initial value (1995) is set at 100. The quality of the archaeolog-ical sites depends on the number of tourists that visit the sites. The quality of the beaches depends on the occupancy rate of the hotels – that is, the number of tourists divided by the number of hotel rooms. When a new hotel is built, a new strip of beach is developed and thus made available for tourists. It is assumed that the av-erage tourist likes a semi-crowded beach and not a totally empty or overcrowded beach.

The Government Module

The government is modeled in a limited way. The government can impose only two policies: one concerning the cleaning of water used by the resident population, and one concerning the cleaning of water used by tourists. The government only pays for cleaning of the water used by the resident population. This payment from the government to the peninsula can be seen as a subsidy. The tourism sector (i.e., the hotel owners) pays for cleaning of the water used by the tourists.

Interactions between Various Modules

The tourists represent an important interaction between the economic module and the tourist module. The demand for tourist nights and the supply of rooms deter-mine the equilibrium price per tourist per night, which is an important variable in the economic module.

The price per tourist night, the occupancy rate, and the profit per room partly determine the investment in both sectors (and regions). The labor force needed in the tourism industry depends on the number of tourists visiting every year. Internal migration is flexible. If the labor is no longer needed in the tourism region, people return to their home regions. The part of the labor force not working in the tourism industry is assumed to work in one of the other economic sectors. Thus, unemploy-ment is included as a part of the rest of the economy. The labor force in the rest of the economy directly influences this sector’s output.

The quality of water depends on water use and water cleaning policies. The demand for tourist nights depends on the quality of the beaches, the archaeological

sites, the water, and other (exogenous) factors. The quality of the beaches and the sites has a one-year delayed effect on the number of tourists. Thus the quality of both will affect next year’s tourists. Water quality has a direct effect on the number of tourists. It is an accumulated variable, equal to the previous year’s water quality plus subsequent changes (positive or negative).