Abstract
Global oil supply is unlikely to meet rapidly growing global demand unless oil prices rise significantly. In New Zealand, a high oil price future threatens the tourism sector, which is a major source of export income. Using a two-stage general equilibrium modelling approach, the long-run economic effects of a permanent decline in the global oil supply are quantified. The tourism sector and especially tourism exports are disproportionately affected, due to a combination of income and price effects. Impacts differ significantly by inbound tourist market segments. The most distant markets are more adversely affected, but distance is only one of several important factors.
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