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Stability of Input—Output Coefficients by Capacity Utilization for Short-Term Tourism Demand Fluctuation

Author

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  • Ya-Yen Sun

    (Department of Transportation and Communication Management Science, National Cheng Kung University, 1 University Road, Tainan City 70101, Taiwan)

  • Kam-Fai Wong

    (Institute of Statistics, National University of Kaohsiung, 700 Kaohsiung University Road, Nan Tzu District, Kaohsiung City 811, Taiwan)

Abstract

The ability to portray accurately the regional economic impacts of short-term tourism demand rests on the resemblances between the long-run input–output (IO) technical coefficients and a short-term production function of business sectors. The purpose of this research was to investigate the stability of cost structure by capacity utilization in the tourism industry, using the accommodation sector in Taiwan as an example. Panel data consisting of firm-level financial information based on 13 individual cost categories from 2000 to 2009 were analysed to reveal the magnitude and direction of cost structure changes with respect to occupancy rate. The results indicated that income multipliers and profit multipliers fluctuated substantially but compensated for each other, while IO technical coefficients were very stable. In a situation involving a tourism event, type I and type II sales multipliers and the value added multipliers of the accommodation sector remained relatively stable, but the standard income multipliers were greatly overestimated, or underestimated for tourism recession scenarios. Applying a regional IO model to estimate short-term tourism demand should therefore take into consideration the substitution pattern between personal income and business profits.

Suggested Citation

  • Ya-Yen Sun & Kam-Fai Wong, 2014. "Stability of Input—Output Coefficients by Capacity Utilization for Short-Term Tourism Demand Fluctuation," Tourism Economics, , vol. 20(3), pages 509-526, June.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:3:p:509-526
    DOI: 10.5367/te.2013.0294
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    References listed on IDEAS

    as
    1. Ya-Yen Sun & Kam-Fai Wong, 2010. "An Important Factor In Job Estimation: A Nonlinear Jobs-To-Sales Ratio With Respect To Capacity Utilization," Economic Systems Research, Taylor & Francis Journals, vol. 22(4), pages 427-446.
    2. Berndt, Ernst R & Morrison, Catherine J, 1981. "Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach," American Economic Review, American Economic Association, vol. 71(2), pages 48-52, May.
    3. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    4. Adam Blake & M. Thea Sinclair & Guntur Sugiyarto, 2003. "Quantifying the Impact of Foot and Mouth Disease on Tourism and the UK Economy," Tourism Economics, , vol. 9(4), pages 449-465, December.
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    Cited by:

    1. Jeroen Klijs & Jack Peerlings & Wim Heijman, 2017. "Introducing labour productivity changes into models used for economic impact analysis in tourism," Tourism Economics, , vol. 23(3), pages 561-576, May.
    2. Sun, Ya-Yen, 2016. "Decomposition of tourism greenhouse gas emissions: Revealing the dynamics between tourism economic growth, technological efficiency, and carbon emissions," Tourism Management, Elsevier, vol. 55(C), pages 326-336.
    3. Sun, Ya-Yen & Cadarso, Maria Angeles & Driml, Sally, 2020. "Tourism carbon footprint inventories: A review of the environmentally extended input-output approach," Annals of Tourism Research, Elsevier, vol. 82(C).
    4. Luis E Pedauga & Ana Pardo-Fanjul & Juan C Redondo & José M Izquierdo, 2022. "Assessing the economic contribution of sports tourism events: A regional social accounting matrix analysis approach," Tourism Economics, , vol. 28(3), pages 599-620, May.
    5. Eduardo Sanguinet & Luis Armando Galvis-Aponte & Inácio F. Araújo & Eduardo A. Haddad, 2020. "Viajeros urbanos de paseo por la playa: efectos regionales del turismo interno en Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 18538, Banco de la República, Economía Regional.

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