When goods are exported, a standard rate of taxation is placed by the proper authorities. If the tax is placed on the goods, it can create a huge effect. If the tax is too high, then the tourist attraction and the tourist demand will possibly decrease. This will result in a negative effect on the economy. But, if the tax is reasonable and not too high, then it will not affect the tourism flow. It will, in turn, create a positive impact on the overall economy and aggregate welfare by increasing tax revenues.
There is a different and a quite opposite aspect to the formerly discussed factor of mobility. Whereas the land and other resources amenities are immobile, labor and capital are mobile. The land can be considered as the only non-tradable commodity or product. Therefore, prices of products and the costs of the services vary from one region to the other depending on the difference of the rentals of the land mass (Ciccone & Hall, 1996). Every region should be analyzed differently. If the labor wage is higher than average in a specific area and the service sectors earn good profit, then it is obvious that the productivity of the cultural service is much higher than the average areas.
It can only be true if that specific region has a huge flow of cultural tourism. It plays a huge role in the economy of the region through manifesting the culture to the tourists. There is another possibility in this case. If the labor wages are higher, then it implies that the local labors have realized that the area has a good flow of cultural tourism. The owners earn good profit by providing various cultural products and services. Therefore, the labors demand for increase in the wage for the better quality of life enhanced by the contribution of cultural tourism (Roback, 1982).
Cultural tourism influences the demand-supply ratio. If the flow of tourism and demand is high, then it will call for more labor recruitment. It will allow the labors to call for increment in wages. Therefore, it is quite clear that cultural tourism has a huge influence on the economic scenario of a cultural destination. It also tries to provide economic increment to the labors so that they can increase the quality of life. This effect has a broad and vast aspect. The mobility of labor and capital influences the change in the pricing of cultural services and amenities. It is noticed that, in the cultural destinations, there is the minimal willingness of the locals to pay for any change in the amenities. This forces the tourists to pay some extra money. The profit in the economy is gained from the extra expenditure of the tourists.