Tourism and the economy: evidence from Brazil.

We explore a discontinuity in the incentives created by the Brazilian Tourism Regionalization Program. We employ a research discontinuity design, focussing on municipalities in the transitions between two classes. We observe significant effects of the Program in tourist cities, including an increase in the value-added of services and per capita GDP. Additionally, we find that the value-added in industrial activities increases, implying a spillover effect from the improvement in local tourism conditions for other economic activities. Our article documents how tourism strategies can have a beneficial effect on a city's entire economic structure. [ABSTRACT FROM AUTHOR]