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

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

by Endre Horváth and Douglas C. Frechtling
Published in Journal of Travel Research vol. 37, no. 4 (May 1999), pp. 324-332.

ABSTRACT

Tourism benefits regional economies through increased
output, labor earnings and employment. Tourism multipliers
embody 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 and ratio
multipliers were analyzed, and the latter was found to be a more
reliable indicator of total impact. A comparison of multipliers for
37 industries and the tourism sector in the city shows that tourism
ranks relatively high in terms of output and labor earnings
generated. These findings suggest recommendations for the
economic growth and development of Washington, D.C.

Estimating the Multiplier Effects of Tourism Expenditures on a Local Economy

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.

http://home.gwu.edu/~frechtli/material/MultiplierEffectsofTourismExpendituresonaLocalEconomy.pdf