Tourism taxation: A synthetic control method for policy evaluation

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