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An Important Factor In Job Estimation: A Nonlinear Jobs-To-Sales Ratio With Respect To Capacity Utilization

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  • Ya-Yen Sun
  • Kam-Fai Wong

Abstract

Many tools for economic impact evaluation, such as input-output models and computable general equilibrium models, rely on the jobs-to-sales ratio (JSR) to convert direct, indirect and induced effects of sales into employment. For service sectors, this ratio is strongly influenced by capacity utilization and exhibits a non-linear pattern, especially for short-term tourism applications that involve dramatic demand fluctuations as a consequence of mega events, natural disasters or societal instability. The purpose of this study is to decompose the relationship between capacity utilization and the JSR so that the underlying factors that cause the instability of JSR can be identified. Time-series data from the Taiwanese tourist hotels and aviation sectors are adopted to discuss the strength of the relations between price per unit and capacity utilization, total employee numbers and utilization, service capacity and utilization, and labor efficiency and utilization, respectively. The results indicate that the adjustment of labor efficiency is the prominent factor in determining the stability of the jobs-to-sales ratio, while price, to employee number and service capacity are relatively stable in response to demand, leading to changing JSRs.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:ecsysr:v:22:y:2010:i:4:p:427-446
    DOI: 10.1080/09535314.2010.526595
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    References listed on IDEAS

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    1. Gasparino, Ugo & Bellini, Elena & del Corpo, Barbara & Malizia, William, 2008. "Measuring the Impact of Tourism Upon Urban Economies: A Review of Literature," Knowledge, Technology, Human Capital Working Papers 37846, Fondazione Eni Enrico Mattei (FEEM).
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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. Giotis Georgios, 2022. "Preliminary Results on the Employment Effect of Tourism. A meta-analysis," Papers 2206.00174, arXiv.org.
    3. 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.

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