Example: tourism industry

Introduction to Development Economics

ity), but also lack institutions common to DC’s; e.g. law, property rights, administrative systems. Let output be produced according to C obb-Douglas production function: Yi = Kα i (AiLhi) 1−α (1) where Lhi istheamountofhumancapital-augmentedlabor—qualityadjusted labor force — used in production, and Ai is a labor-augmenting measure ...

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