Economic Lessons from heavy crowding at Mt. Everest

Jim O’Neill in this piece applies ecomomic lens to the heavy overcrowding seen at Mt Everest this year:

Beyond specific conditions such as the narrowness of the trail, Everest’s overcrowding problem is not so different from many other economic and social challenges that policymakers confront, namely an imbalance between supply and demand, and possibly poor regulation. One example, of special concern to me, is the , which is failing because the development of new drugs is not keeping pace with demand. But more closely related to Everest is the broader challenge of managing tourist hotspots. Around the world, more and more people have joined the middle class, and they (understandably) want to experience the best that the planet has to offer.

When it comes to Everest, part of the problem is a fixed supply. There are only so many paths up the mountain (though some daring alpinists, no doubt, prefer to blaze their own), but the number of tour groups has increased. Given this, it stands to reason that the price should be allowed to rise until the balance between supply and demand is restored.

Of course, Nepalese policymakers, eager for tourism revenue, would balk at this suggestion; and they would probably argue that the average visitor should not be turned away from such a massive natural attraction. But, in that case, they must introduce and enforce stricter safety and regulatory standards for the companies offering tours up the mountain (which will also put upward pressure on prices).

The same fixed-supply problem applies to all tourist hotspots. As I have noted previously, Switzerland would have to produce more beautiful mountains to have any hope of satisfying the burgeoning demand from Chinese tourists visiting the Alps. The same can be said of Petra, Jordan, or any other wonderful destination. In all of these cases, the rational economic solution is to allow the price to rise, or to introduce more stringent regulatory controls.

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