The Pricing Decisions Of Public Scenic Areas Based On The Externalities In Tourism

price and the number of tourists and tourists' consumption. Based on these relationships, we cope with the multiple externalities present in tourism, and determine the optimal pricing decisions for public tourism resources, which vary according to the different features of the scenic areas and different objects of local governments. Finally, with the aid of a quasi-experimental research, we examine the relationship between the externality of crowdedness and the pricing decision empirically.We reach the following conclusions:(1) The number of tourists decreases with the ticket price, however, in the presence of the externality of crowdedness, the decrease in the number will be smaller. The relationship between the price and the total consumption of the tourists is ambiguous, that is, when there are too many tourists in the area, the externality of crowdedness exerts large negative impacts on the individual tourist's utility. In this case, a higher price may help to distinguish tourists with high willingness to consume, from those with low willingness to consume, therefore increase the total amount of consumption. The results of the quasi-experiment show, when facing the tradeoff between the price effect and the crowded effect, a tourist who is different in choosing a particular scenic area and others behaves quite randomly, which drives the relationship between the change of the price and the tourism revenue nonlinear.(2) If the negative externality imposed on the environment by tourism, is related directly with the number of the tourists, then raising the price helps to protect the environment, whether the externality of crowdedness exists or not. However, when the environmental externality is mainly cause by the tourists' consumption in the area, and the externality of crowdedness is in presence, raising the entry fee cannot guarantee the total amount of the tourists' consumption will decrease. In fact, in some cases it may even increase, therefore will do a greater harm to the environment.(3) When the environmental system in the scenic area repairs itself so easily, that the environmental externality imposed by the tourism can be neglected, and the externality of crowdedness does not exist, under some special functional forms, the object of direct tourism revenue coincides with that of local economic growth. In this case, the decision maker will choose the lowest price (or even for free) which induces all the potential consumers to choose this particular area as their destination. However, in general, if the decision maker only cares about the direct tourism revenue, he will choose a higher price than that chosen by a decision maker who cares about the development of local economy.In sum, for different types of public scenic areas, to determine a reasonable price, we should take into account the heterogeneity in the tourists'preferences, the presence of the externality of crowdedness, and the extent of the enrivonmental externality imposed by tourism, and maximize the sum of the direct tourism revenue and the positive effect on the local economic growth, net of the cost imposed on the environment.This paper not only provides a more reasonable answer based on public economics, to the recent argument over whether public scenic areas should be admission-free to the public, but also offers new insights and solutions to the pricing decisions of public scenic areas which aim to develop tourism.