This paper examines some societal costs involved in tourism development in developing countries,and argues — using the theory of developmentaleconomics — that although the social value of an act of tourism investment should exceed its social cost, the valuation techniques used to estimate these costs during the investment decision process are not fully developed. It providesmodifiedinternalrate ofreturn(IRR) and netpresentvalue (NP»)models,aspossible measurementtoolstobe consideredin theinvestmentcriteriatohelpsolve thisproblem.Policy makers can incorporate these models into studies of tourism’s overall desirability. ( 1999 Elsevier Science Ltd. All rights reserved.