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tourism economics

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  2. 2. ECONOMICS  The word Economics is derived from the Greek word “OKIOS NEMEIN” meaning household management  Man is a bundle of desires. Goods and services satisfy these wants. But almost all the goods are scares  To produce goods factors of production are needed and these are all scarce  ECONIMICS is the branch of knowledge concerned with the production consumption and transfer of wealth.  Economics – the study of how individuals and societies make decisions about ways to use scarce resources to fulfill wants and needs.
  3. 3. SCOPE OF ECONOMICS  The horizon of economics is gradually expanding. It is no more a branch of knowledge that deals only with the production and consumption. However, the basic thrust still remains on using the available resources efficiently while giving the maximum satisfaction or welfare to the people on a sustainable basis. Given this, we can list some of the major branches of economics as under: 1. Microeconomics: This is considered to be the basic economics. Microeconomics may be defined as that branch of economic analysis which studies the economic behaviour of the individual unit, may be a person, a particular household, or a particular firm. It is a study of one particular unit rather than all the units combined together. The microeconomics is also described as price and value theory, the theory of the household, the firm and the industry. Most production and welfare theories are of the microeconomics variety.
  4. 4. 2. Macroeconomics: Macroeconomics may be defined as that branch of economic analysis which studies behaviour of not one particular unit, but of all the units combined together. Macroeconomics is a study in aggregates. Hence it is often called Aggregative Economics. It is, indeed, a realistic method of economic analysis, though it is complicated and involves the use of higher mathematics. In this method, we study how the equilibrium in the economy is reached consequent upon changes in the macro-variables and aggregates. 3. International economics: As the countries of the modern world are realising the significance of trade with other countries, the role of international economics is getting more and more significant nowadays. 4. Public finance: The great depression of the 1930s led to the realisation of the role of government in stabilising the economic growth besides other objectives like growth, redistribution of income, etc. Therefore, a full branch of economics known as Public Finance or the fiscal economics has emerged to analyse the role of government in the economy. Earlier the classical economists believed in the laissez faire economy ruling out role of the government in economic issues. 5. Development economics: As after the second world war many countries got freedom from the colonial rule, their economics required different treatment for growth and development. This branch developed as development economics.
  5. 5. 6. Health economics: A new realisation has emerged from human development for economic growth. Therefore, branches like health economics are gaining momentum. Similarly, educational economics is also coming up. 7. Environmental economics: Unchecked emphasis on economic growth without caring for natural resources and ecological balance, now, economic growth is facing a new challenge from the environmental side. Therefore, Environmental Economics has emerged as one of the major branches of economics that is considered significant for sustainable development. 8. Urban and rural economics: Role of location is quite important for economic attainments. There is also much debate on urban-rural divide. Therefore, economists have realised that there should be specific focus on urban areas and rural areas. Therefore, there is expansion of branches like urban economics and rural economics. Similarly, regional economics is also being emphasised to meet the challenge of geographical inequalities. There are many other branches of economics that form the scope of economics. There are welfare economics, monetary economics, energy economics, transport economics, demography, labour economics, agricultural economics, gender economics, economic planning, economics of infrastructure, etc.
  6. 6. METHODOLOGY OF ECONOMICS  Economics is also like a science but it is a social science. It deals mainly with the human behaviour. Therefore, many economists argue that economics can not be as precise a science as the natural sciences like physics, chemistry etc. The latter can be studied in the laboratory conditions where variables can be easily controlled during experiments. However, social sciences like economics can not be easily controlled. Still over a period of time economic sciences have gained maturity to develop its methodology which is proving now to be quite efficient and such methodologies can be used for efficient analysis of the economic relationships and predictions can be made with sufficient accuracy that generate a sense of confidence and faith. There are two broad methods used in the economic sciences. 1. The deductive method 2. The inductive method
  7. 7. 1. The deductive method: This method involves going from general to particular. Certain hypotheses or postulates regarding human behaviour are taken to be true and then with the help of logical reasoning and examination, we try to figure out the cause and effect relationship between the factors under consideration. 2. The inductive method: Although deductive method has strong points of merit to depend upon, this methodology seems to suffer from certain weaknesses. Therefore, economists belonging to the historical school and many other economists have favoured the inductive or empirical method. The method of induction involves going from particular to general. Here the appeal is to facts, rather than reasoning and an attempt is made to arrive at conclusions from the known facts of actual life.
  9. 9. TOURISM SUPPLY Tourism supply is a composite product involving transport, accommodation, catering, natural resources, entertainment, and other facilities and services, such as shops and banks, travel agents and tour operators.
  10. 10. FACTORS AFFECTING TOURISM SUPPLY 1. Economic 2. Political 3. Geographical 4. Legal 5. Technological 6. Social
  11. 11. Tourism Product TransportTourists Area of Origin Tourists Destination Tourists Demand Product Package Supplier Associated Services Government NGOs Tourism Operators Services Tour Guides + Drivers ACCOMMODATION Components of Tourism Supply (supply chain)
  12. 12. SUPPLY COMPONENTS  Natural or environmental resources (physiographic of the area, landforms, flora, fauna, water bodies, air quality and similar natural phenomena)  Built or man-made resources (infrastructure, superstructure)  Transportation  Hospitality and cultural resources (friendliness, courtesy, sincere interest and willingness to serve and to be better acquainted with visitors)
  13. 13. DEMAND-SUPPLY LINK Demand Generating Origin Supply Receiving Destination Marketing and Promotion
  14. 14. TOURISM DESTINATION PLANNING  The availability of natural resources and attractions  The availability of investment funds  A skilled human resource base  Government policy that supports tourism  Destination accessibility  The presence of complementary services and facilities and infrastructure