Estimating the Multiplier Effects of Tourism Expenditures on a Local Economy through a Regional Input-Output Model

Douglas C. Frechtling
Department of Tourism and Hospitality Management, School of Business and Public Management, The George Washington University
Endre Horváth
Department of International Business of the Budapest University of Economic Sciences, Budapest, Hungary
Abstract

Tourism multipliers indicate the total increase in output, labor earnings, and employment through interindustry linkages in a region as a result of tourism expenditures. The RIMS II regional input-output model was employed to estimate the multiplier effects of visitor expenditures in Washington, D.C. Both normal multipliers and ratio multipliers are analyzed, and the latter is found to be a more reliable indicator of total impact on earnings and employment in the city. A comparison of the multipliers for 37 industry sectors and the tourism multiplier in the city finds that the latter ranks relatively high for earnings and employment, but low for output.

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