The Effects of Governmental Restrictions on Outbound Tourist Expenditures

Without a considered analysis of the costs and benefits of policies that restrict tourist activity, the various parties that influence and are influenced by the development of the tourism industry may be frustrated in their search for productive dialogue and consensus. Although restrictive policies on outbound tourism are common and widespread, little prior work has examined the effectiveness and consequences of such policies. This article evaluates the impacts on outbound tourist behavior of lowered duty-free import limits in the case of Mexican cross-border visitors to the United States. Results suggest that (a) stable cross-border expenditures and compensatory behavior by outbound tourists may limit the effectiveness of restrictions on duty-free imports and that (b) these restrictions may increase overall tourism imports, implying that attempts to restrict or regulate tourist activity may produce results that are the opposite of those intended.