Abstract
Host attitudes towards tourists are critical to the sustainable development of the tourism industry. Although numerous studies have focused on investigating host attitudes towards tourists and tourism development, the theoretical support from an economic perspective in this field is still underdeveloped. By following the social exchange theory and applying a utility maximization model, the current study not only explains Doxey’s Irridex model from an economic perspective but also complements the findings of the tourism area life cycle model proposed by Butler. Results show that the public resources at the destination, along with the ability of local community in channeling (foreign) tourism income into productivity advancement, influence the optimal level of tourism development in a destination.