Tourism taxation: A synthetic control method for policy evaluation

To date, few studies have explored the relationship between tourism inflows and city taxes. Thisstudy investigates how the introduction of a city tax impacts on both national and internationaltourism demand by using the synthetic control method. The case study is based on a panel ofItalian municipalities, for the time span 2006–2011. Results from estimations with the syntheticcontrol method show that the introduction of a visitor tax leads to a decline in domestic tourismdemand. In contrast, there is no effect on international tourism inflows