The Impacts of Temporary and Anticipated Tourism Spending

Grant Allan, Patrizio Lecca, Kim Swales

Research output: Working paperDiscussion paper

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Abstract

Part of the local economic impact of a major sporting event comes from the associated temporary tourism expenditures. Typically demand-driven Input-Output (IO) methods are used to quantify the impacts of such expenditures. However, IO modelling has specific weaknesses when measuring temporary tourism impacts; particular problems lie in its treatment of factor supplies and its lack of dynamics. Recent work argues that Computable General Equilibrium (CGE) analysis is more appropriate and this has been widely applied. Neglected in this literature however is an understanding of the role that behavioural characteristics and factor supply assumptions play in determining the economic impact of tourist expenditures, particularly where expenditures are temporary (i.e. of limited duration) and anticipated (i.e. known in advance). This paper uses a CGE model for Scotland in which agents can have myopic- or forward-looking behaviours and shows how these alternative specifications affect the timing and scale of the economic impacts from anticipated and temporary tourism expenditure. The tourism shock analysed is of a scale expected for the Commonwealth Games to be held in Glasgow in 2014. The model shows how “pre-shock” and “legacy” effects – impacts before and after the shock – arise and their quantitative importance. Using the forward-looking model the paper calculates the optimal degree of pre-announcement.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-29
Number of pages30
Volume14
Publication statusPublished - 2014

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Keywords

  • economic impact
  • cge modelling
  • mega-events

Cite this

Allan, G., Lecca, P., & Swales, K. (2014). The Impacts of Temporary and Anticipated Tourism Spending. (06 ed.) (pp. 1-29). Glasgow: University of Strathclyde.