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Exploring the Full Economic Impact of Tourism for Policy Making
Tue 03 Apr 2012
Extending the Use of the Tourism Satellite Account through Macroeconomic Analysis Tools
Mr. Douglas C. Frechtling, UNWTO Consultant under the supervision of UNWTO Statistics and Tourism Satellite Account (TSA) Programme distributed on the occasion of the T.20 Ministers’ Meeting in Paris – October 2011
The Tourism Satellite Account (TSA) is a unique tool now available to policymakers in many countries to document the direct Gross Domestic Product (GDP) and employment contributions of tourism to national economies.
Policymakers are also interested in estimating other aspects of the economic impact of tourism by using TSA data to estimate the income and government revenue generated by Tourism Consumption and incorporating the secondary effects of this spending on the economy. These secondary effects “multiply” the impacts of tourism through engaging additional suppliers and households in servicing Tourism Expenditure. Moreover, policymakers seek to understand how external and policy-induced “shocks” to the economy will affect tourism‟s contributions.
Three macroeconomic analysis tools are available for policy-makers to extend the understanding of the economic benefits of Tourism Expenditure: the Input-Output Model, the Social Accounting Matrix and the Computable General Equilibrium Model. This paper summarizes each of these in turn, describes their relationships, discusses strengths and weaknesses, and suggests how TSA data can be used as input in deriving estimates of the overall economic impact of tourism. Such analysis is the precondition for an accurate understanding of tourism as part of a national economy, enabling the integration of tourism into broader economic policy.