Tourist heterogeneity in carbon compensation: a two-stage framework for sustainable island tourism policy

Abstract

Small island tourism destinations face a paradox: prosperity depends on the natural assets that tourism threatens. Current compensation policies fail by treating tourists identically through single-stage frameworks that conflate participation barriers with contribution intensity. Using stated preference data from 70,930 Canary Islands tourists, hurdle models with bootstrap validation separate participation (Stage 1: complementary log-log) from contribution intensity (Stage 2: OLS) across four compensation levels (<5% to >20% of trip expenditure). Education increases participation yet reduces contribution intensity (& euro; - 0.23 to & euro;-6.63); near-zero residual correlation (rho = 0.0004, p = 0.955) confirms distinct mechanisms govern each stage. Progressive taxation aligned with spending capacity generates & euro;770.4 M versus & euro;267.9 M from flat rates-a 188% revenue increase-transforming compensation into a self-financing mechanism requiring expenditure proxies and machine learning for full implementation.