Abstract:

The promotion of small-scale tourism is intuitively perceived as a suitable form of economic development for rural areas. However, its impact is controversial and not always obvious. To examine these issues, this paper presents an empirical analysis of public support to small-scale tourism enterprises in rural areas in Israel. Using the tools of cost-effectiveness and cost–benefit analysis, public assistance for this type of activity is shown to be able to generate considerable returns. Methodological issues in this kind of analysis are also discussed and the policy implications arising with respect to the suitability of different forms of tourism activity in rural areas are presented.

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