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

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 (20% of trip expenditure). Education increases participation yet reduces contribution intensity (€ − 0.23 to €-6.63); near-zero residual correlation (ρ = 0.0004, p = 0.955) confirms distinct mechanisms govern each stage. Progressive taxation aligned with spending capacity generates €770.4 M versus €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.