Natural Disasters and Tourism Prosocial Consumption

This paper investigates the effect of natural disasters on tourism expenditure. We exploit the natural experiment of the recent volcanic eruption in La Palma (2021), an island in the archipelago of Canary Islands (Spain), to analyze the effect of the volcanic eruption on both aggregate expenditure and expenditure by category. We find that the volcanic eruption had a positive effect on our dependent variables, both for the eruption and the post-eruption period. We investigate the mechanisms behind this result and obtain strong support for the empathy mechanism, prevailing over other mechanisms such as the price mechanism and the tourism-profile mechanism. Our results provide evidence of prosocial consumption among tourists, with prosocial consumption increasing in the social identification of tourists with the island