This paper reviews how economic modelling provides a deeper understanding of drug markets. The exercise focuses on ‘soft drugs’ (cannabinoids) in the Netherlands and outlines the effects of prohibition and legalisation. The purpose is to present an overview of analytical tools to non-economists. Based on a basic supply and demand framework the impact of enforcement, externalities, producer incentives and demand elasticity are highlighted. Results indicate that social welfare is maximized under legalisation given limited externalities associated with consumption and price inelastic demand. We recommend a liberalized soft drugs market that requires inter alia taxation, complemented with various health measures like quality controls and public campaigns. The Dutch case is exemplary, as this economic perspective offers universal building blocks relevant to the legalisation debate in other countries, and potentially to other substances
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In tourism and recreation management it is still common practice to apply traditional input-output (IO) economic impact models, despite their well-known limitations. In this study the authors analyse the usefulness of applying a non-linear input-output (NLIO) model, in which price-induced input substitution is accounted for. For large changes in final demand, a NLIO model is more useful than a traditional IO model, leading to higher or lower impacts. For small changes in final demand input substitution is less likely. In that case the application of the NLIO may lead to the same results as a traditional IO model. To analyse changes of subsidies, a traditional IO model is not an option. A more flexible model, such as the NLIO, is required. The NLIO model forces researchers to make choices about capacity constraints, factor mobility and the substitution elasticity, which can be difficult but create flexibility and allow for more realism.
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By use of a literature review and an environmental scan four plausible future scenarios will be created, based on the research question: How could the future of backpack tourism look like in 2030, and how could tourism businesses anticipate on the changing demand. The scenarios, which allow one to ‘think out of the box’, will eventually be translated into recommendations towards the tourism sector and therefore can create a future proof company strategy.
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