This study analyzes a market failure in cultural tourism interpretation sector and shows that government intervention improves the market failure. Using a theoretical economic model, we present two propositions. The first is that if you leave the cult...
This study analyzes a market failure in cultural tourism interpretation sector and shows that government intervention improves the market failure. Using a theoretical economic model, we present two propositions. The first is that if you leave the cultural tourism interpretation to the private sector, the inputs of cultural tourism interpreters are lower than the Pareto efficient level. Number of tourists and tourism service quality are also lower than in the Pareto efficient level. The second shows that the gap between the private equilibrium input level and the Pareto efficient level increases as cultural tourism interpreters become more efficient. This result has important implications for public policy in cultural tourism interpretation market.