Barcelona Is Not for Sale: The Economic Analysis on the Limitations of Tourism in Barcelona

Abstract

Previously tourism has been a supported element of international trade, but now this trend seems to be broken by a Spanish legislation intended to limit tourism in Barcelona. This paper aims to examine the reasons for such a government policy, evaluate the efficiency of the current measure and elabourate on possible solutions. Our findings, based mainly on microeconomic analyses, suggest that both the locals and the government have incentives to support restrictions on tourism while the present policy is not likely to be the most optimal solution. A combination of price discrimination and a tariff-rate-quota might be a better option.