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Triple bottom line analysis of the decline in foreign tourist demand in Japan due to the COVID‐19 pandemic: Counterfactual structural decomposition approach

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  • Yusuke Oga
  • Shigemi Kagawa

Abstract

This study developed a consumption‐endogenous input–output analysis framework and a novel counterfactual structural decomposition analysis (SDA) framework to assess the economic, social, and environmental effects of the 2020 decline in foreign tourists due to the COVID‐19 pandemic. The results show a pandemic‐induced loss of 33 million tourists, resulting in 3.44 trillion JPY in value‐added losses, employment declines for 868,976 people, and environmental benefits of an 11.6 Mt‐CO2 emissions reduction. Sectors hit the hardest include hotels, eating and drinking services, and wholesale and retail trade. The deterioration revealed a 100% reduction in value added from foreign visitors, whereas shifts in production contributed to a 3.6% increase in CO2 emissions. This study recommends government intervention, focusing on stipends for sectors with the highest value‐added losses and employment declines, as well as support funds for sectors that reduce environmental impact.

Suggested Citation

  • Yusuke Oga & Shigemi Kagawa, 2025. "Triple bottom line analysis of the decline in foreign tourist demand in Japan due to the COVID‐19 pandemic: Counterfactual structural decomposition approach," Journal of Industrial Ecology, Yale University, vol. 29(2), pages 518-530, April.
    • Handle: RePEc:bla:inecol:v:29:y:2025:i:2:p:518-530
    DOI: 10.1111/jiec.13615
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