This book offers students an accessible and applied introduction to microeconomics in tourism and hospitality through a comprehensive analysis of the market mechanism, demand and supply, firm behavior and strategy, and transaction and institution.
This book not only helps students to master core microeconomic theories that are essential for understanding the tourism and hospitality industry, but, more importantly, it guides students to analyze consumer behavior and firm strategy specific to the industry. Throughout the book, readers are guided to develop the economic analysis of tourism and hospitality that progresses from economic intuition to graphical representation and to mathematical quantification. Carefully corralled case studies showcase the applications of key microeconomic theories in solving a wide range of real-world problems, including Uber's surge pricing, Airbnb's supply adjustment, and McDonald's and Burger King vying for prime locations. This book is written in an accessible style, illustrated with exquisite diagrams, and enriched with a range of other features, such as chapter summaries, review questions, and further readings to aid readers' further understanding.
By reading this book, students will be able to develop an economist's way of thinking, which will enable them to analyze tourism and hospitality businesses in a rigorous and critical manner. This book is essential reading for all tourism and hospitality students and teachers.
Autorentext
Yong Chen, Ph.D., is an Associate Professor at Ecole hoteliere de Lausanne (EHL), Switzerland, where he lectures on economics of tourism and hospitality. Prior to joining EHL in 2014, he was a Postdoctoral Fellow in the School of Hotel and Tourism Management at The Hong Kong Polytechnic University, where he also obtained his Ph.D. in 2012. Dr. Chen's research interests include tourist behavior, tourism demand, the sharing economy, and Chinese outbound tourism. Dr. Chen's research has been published in a diverse range of reputable journals and his opinions have also appeared in CNN, CGTN, South China Morning Post, Sixth Tone, and EHL Hospitality Insights.
Inhalt
MODULE 1 The market
1 Economic approach to tourism and hospitality
1.1 Tourism and hospitality
1.1.1 The making of modern tourism
1.1.2 The essence of hospitality
1.1.3 Tourism versus hospitality
1.2 Breadth and depth of tourism and hospitality
1.2.1 Breadth of the tourism industry
1.2.2 Depth of the tourism industry
1.2.3 Supply expansion in tourism and hospitality
1.3 The tourist and the tourist economy
1.3.1 Tourism and the tourist
1.3.2 Tourism consumption
1.3.3 Global tourism growth and distribution
1.4 Economic significance of tourism
Summary
Review questions
Problem solving
Bibliography
2 Demand, supply, and the market
2.1 Economic thinking
2.2 Equilibrium analysis
2.2.1 Laws of demand and supply
2.2.2 Market equilibrium
2.2.3 Demand and supply versus quantity demanded and supplied
2.3 Economic surplus and market efficiency
2.3.1 Consumer surplus, producer surplus, and social surplus
2.3.2 Price controls and deadweight loss
2.3.3 Market efficiency
2.4 Determinants of demand and supply
2.4.1 Push factors versus pull factors
2.4.2 Demand drives supply
2.4.3 Supply creates demand
Summary
Review questions
Problem solving
Bibliography
3 Uber's surge pricing and market efficiency
3.1 What is a surge in demand?
3.2 How does surge pricing work?
3.2.1 Riders, drivers, and surge multipliers
3.2.2 Surge pricing works
3.2.3 Surge pricing fails
3.3 Welfare analysis of surge pricing
3.3.1 Economic surplus
3.3.2 Empirical evidence
3.4 Information, price signal, and market efficiency
3.4.1 Surge multiplier as the price signal
3.4.2 "The use of knowledge in society"
Summary
Problem solving
Bibliography
MODULE 2 Demand
4 Consumer choice and demand
4.1 The economic problem
4.2 Utility, preference, and indifference curve
4.2.1 Utility and diminishing marginal utility
4.2.2 Consumption bundle and preference relation
4.2.3 Indifference curve
4.3 Budget constraint and consumer optimization
4.3.1 Budget line
4.3.2 Consumer optimization
4.3.3 Equalization of marginal utility per dollar
4.4 Derivation of the demand curve
4.4.1 Consumer optimization and the demand curve
4.4.2 Properties of the demand curve
4.4.3 Demand functions
4.5 The work·leisure tradeoff
4.5.1 Substitution effect
4.5.2 Income effect
4.5.3 Opportunity cost of leisure
Summary
Review questions
Problem solving
Bibliography
5 Elasticity of consumer demand
5.1 The responsiveness of demand
5.2 Defining and calculating elasticity
5.2.1 Arc elasticity
5.2.2 Midpoint elasticity
5.2.3 Point elasticity
5.3 Interpretation of elasticity
5.3.1 Nature of the effect
5.3.2 Magnitude of the effect
5.4 Major elasticities of demand
5.4.1 Price elasticity of demand
5.4.2 Income elasticity of demand
5.4.3 Cross-price elasticity of demand
5.5 Price elasticity and firm revenue
5.5.1 Price elasticity of linear demand
5.5.2 Price elasticity and firm revenue
Summary
Review questions
Problem solving
Bibliography
6 Network effects in market demand
6.1 Individual demand versus market demand
6.1.1 Additivity in market demand
6.1.2 Demand interdependence and non-additivity
6.1.3 Network externality and network effects
6.2 Network effects and market demand
6.2.1 Bandwagon effect
6.2.2 Snob effect
6.2.3 Veblen effect
6.3 Nonfunctional demand and utility
6.3.1 Functional demand versus nonfunctional demand
6.3.2 Functional utility versus nonfunctional utility
6.4 Consumer belief and information cues
Summary
Review questions
Problem solving
Bibliography
7 Demand for Pinot Noir versus Merlot: The Sideways effect
7.1 Sideways and the wines
7.2 Sideways on wine consumption
7.2.1 Standardization and comparisons
7.2.2 The Sideways effect on quantity
7.2.3 The Sideways effect on price
7.3 Decomposing price and the Sideways effect
7.3.1 Change in price or quantity
7.3.2 Changes in both price and quantity
7.4 Consumer knowledge and the Sideways effect
7.4.1 Consumer knowledge and wine consumption
7.4.2 Heterogeneity of the Sideways effect
Summary
Problem solving
Bibliography
MODULE 3 Supply
8 Firm production and cost
8.1 Production function
8.1.1 Capital and labor
8.1.2 Diminishing marginal product
8.2 Derivation of cost curves
8.2.1 Cost structure
8.2.2 Cost concepts
8.2.3 Cost curves
8.3 Cost and short-run production
8.3.1 Revenue, cost, and profit
8.3.2 Breakeven point
8.3.3 Firm optimization
8.4 Cost and long-run production
8.4.1 Long-run average cost
8.4.2 Economies of scale