Taking Matters Into Their Own Hands

When I visited South Korea, my friend made sure to take me to Ihwa Mural Village. A once poor neighborhood, Ihwa Mural Village was transformed back in 2006 by the Ministry of Culture, Sports and Tourism. The village is now covered in beautiful murals done by local artists. The revitalization of the village worked and Ihwa Mural Village is now a popular tourist attraction, especially after becoming the backdrop of popular Korean Dramas. Local store owners have greatly benefited from the influx of customers and artists get a chance to utilize their talents to benefit their community. Seems like a win for everyone. So, what's the fatal flaw that created a negative consumption externality? Noise.

What used to be one of Ihwa's main attractions

Sign asking visitors to be quiet

Villagers, while appreciative of the increase in business, became fed up with all the noise that tourists were making. One shop owner stated that it got so bad that he has "chosen only to work [there] and to live far away from [the] area." Signs are now all over the village urging tourists to be mindful of village residents, but some villagers decided that signs were not enough. One night, three village residents decided they were going to fix the negative consumption externality on their own. They took buckets of gray paint and covered up one of the village's most famous murals. This sent a strong message to tourists that these villagers no longer intended to bear the costs of their visits.

What the stairs looked like when I visited

After visiting Ihwa Mural Village myself a couple of summers ago, I believe the villagers' problems are far from over. Even after the destruction of one of the most famous murals, it was still crowded and loud. In order to mitigate the negative consumption externality, I believe fees must be put into place. Currently, there is no fee upon entry to the village. As a result, tourists can come and go as they please, leaving the villagers to shoulder the entire cost of their stay. The addition of a fee would help fix the current over-consumption that is taking place, bringing the village closer to allocative efficiency. If nothing is done, Ihwa Mural Village runs the risk of being destroyed by angry villagers which would in turn greatly harm local store owners. In order to remedy the negative consumption externality, fees upon entry should be implemented.