This thesis is a collection of three chapters that seek to analyse policies aimed at tourism.
Within the three chapters are developments and extensions of two different
macroeconomic modelling techniques: Input-Output (IO) and Computable General
Equilibrium (CGE) modelling. These models have been developed and used to
understand a variety of different scenarios that are applicable in the Scottish tourism
context and can be adapted to other tourism regions. Chapter 2 uses a tourism-specific
Input Output (IO) framework to assess the macroeconomic impacts of a tourism subsidy,
considering the government's cost in imposing the subsidy. Chapter 3 considers an
accommodation tax through the lens of a tourism-extended CGE model. AMOSTRAVEL
is described in Chapter 3. It has been developed as a tourism-specific CGE model,
including the introduction of domestic and inbound tourism categories for analysis.
Chapter 4 builds on this analysis by including an environmental extension to the tourism
CGE model. Chapter 4 analyses three different policies that affect tourism demand: An
accommodation tax, a land transport tax and a fuel sales tax. In all three chapters, the
macroeconomic effect of policies aimed at tourism is analysed through macroeconomic
models.
Chapter 2, titled VAT Reduction to the Accommodation Sector in Scotland: An Application
of Input-Output Modelling, uses IO modelling to understand a tourism subsidy in the form
of a VAT reduction specifically to the Accommodation sector. The chapter makes two
distinct contributions to the literature. First, we account for the costs associated with fiscal
policy at a regional level to encourage additional tourism consumption. Previous studies
have assumed that policies aimed at encouraging tourism have no cost to the regional
government. We show that introducing a cost unambiguously reduces economic activity,
so the net effect of such a policy would depend on the increase in tourism expenditure
resulting from a policy intervention. We repeat this analysis by disaggregating spending
across different tourism categories. This involves a disaggregation of Scottish national
accounts.
Chapter 3 is titled Incorporating Tourism Heterogeneity in a Computable General
Equilibrium Framework for a Small Regional Economy. CGE models are widely used to
analyse changes in tourism demand. Due to their reliance on economic accounts, the
models have limited detail on different categories of tourism demand and are often limited
to the analysis of changes in “inbound” (i.e. non-resident) tourism demand. Such analysis,
however, cannot account for the interconnections between inbound and domestic (i.e.,
resident) tourism, which generally is a large part of total tourism consumption. In this
chapter, we outline a methodology to address these issues using a case study of Scotland.
We first address these problems by using the tourism disaggregated national accounts in
Chapter 1, which includes spending for five different consumption categories: domestic
day visitors and overnight visitors, Great Britain day visitors and overnight, and
international overnight visitors. These categories are then incorporated into
AMOSTRAVEL using conventional utility functions that reflect the price-sensitive
behaviour of both domestic and international tourists. We highlight the added value of
our disaggregation through a variety of tourism-specific simulations and compare our
approach to more traditional methods. Results from simulation and methodological
implications are fundamental not only for the academic literature but also as a guide to
policymakers focused on making tourism decisions.
Chapter 4, titled Reducing Emissions through Fiscal Interventions and the Impacts on
Tourism Spending and the Economy, assesses the environmental impacts of three potential
taxes on tourism. Taxes like these will naturally have a negative impact on tourism
demand but will also have negative impacts on key economic indicators such as GDP,
Employment, and Household Consumption, as seen in Chapter 2. However, another
important implication of these policy changes is the environmental impact. We analyse
the emissions impacts of three policies aimed at tourists through environmental
extensions to AMOSTRAVEL. We introduce a methodological novelty in this chapter as
we include industrial emissions (emissions relating to industries in the national accounts)
and consumption emissions (emissions relating to the consumption categories that are presented in the model. We find that there are different economic impacts from each of
the taxes; the accommodation tax is the most negative and has the most environmental
(emissions reductions) of the three taxes. Although there is no way to suggest that these
results reflect reality, the results raise some interesting questions for tourism policy in
balancing economic impacts vs environmental impacts.
| Date of Award | 5 Dec 2024 |
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| Original language | English |
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| Awarding Institution | - University Of Strathclyde
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| Sponsors | University of Strathclyde |
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| Supervisor | Grant Allan (Supervisor) & Gioele Figus (Supervisor) |
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