Macroeconomics
To an island like Timbucktoo in the South Pacific, tourism would mean building hotels, lodges and other recreation facilities. What this means for the locals is creation of employment. The locals would be involved in not only building of these hotels but also in running them. This would not only act as job creation but also as a source of alternative income to the locals, which would be a positive impact to the local economy. However, inasmuch as there is creation of jobs, there is a high likelihood that these jobs will be semi-skilled, part time, poorly paid and most of all taking the people away from their traditional forms of employment. This will consequently affect the economy in a negative way. During tourist seasons, the prices of commodities are likely to shoot up and this will see prices of food, land and houses increase especially in high seasons. The environment is also likely to be degraded as a result of littering and pollution from both vehicles and industries.
Despite all these shortcomings, tourism is likely to boost the local economy. One question remains however. Does the increase in Gross domestic product (GDP) automatically mean happiness to the inhabitants of the island First and foremost, people will tend to compare their income with that of other people and since some earn more than others, even as the country grows economically, it will not in any case affect especially the lower earners. In addition to this, the residents will tend to adjust very fast to changes in the standards of living. They will move from unemployment to employment and they will be happy to have started earning. The effect of this gradually fades away as they quickly forget their happiness. What is really essential for the low income earners is meeting their basic needs. The only way income may increase happiness for the locals is by providing tangible benefits like food, clothing, shelter, medicine among others that have no direct effect on individual well being. Among these low income class earners, the only advantage of income is the position derived from social contrast in other words, some people having more than others. The ones at the top end up feeling good while those at the bottom up feeling intimidated.
Irrespective of all these, tourism for instance, is a source of revenue to very many countries. It does not only boost the economy of a nation but also benefits individuals as it acts as a source of employment to these individuals. In my own opinion, spending money is the best method of investment. By spending, is able to create avenues of getting income. For example, buying a piece of land and developing it would cost quite some amount of money. After completion however, one can decide whether to rent out that development or alternatively lease it. This for one will act as a source of employment, and creating employment is one way of boosting the nations economy as the government is able to collect tax. In addition to this, it creates a source of revenue for oneself and this will be mutually benefiting to both the individual and the tenants.