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The impacts of temporary and anticipated tourism spending

Author

Listed:
  • Grant Allan

    (Department of Economics, University of Strathclyde)

  • Patrizio Lecca

    (Department of Economics, University of Strathclyde)

  • Kim Swales

    (Department of Economics, University of Strathclyde)

Abstract

Part of the local economic impact of a major sporting event comes from the associated temporary tourism expenditures. Typically demand-driven Input-Output (IO) methods are used to quantify the impacts of such expenditures. However, IO modelling has specific weaknesses when measuring temporary tourism impacts; particular problems lie in its treatment of factor supplies and its lack of dynamics. Recent work argues that Computable General Equilibrium (CGE) analysis is more appropriate and this has been widely applied. Neglected in this literature however is an understanding of the role that behavioural characteristics and factor supply assumptions play in determining the economic impact of tourist expenditures, particularly where expenditures are temporary (ie of limited duration) and anticipated (ie known in advance). This paper uses a CGE model for Scotland in which agents can have myopic- or forward-looking behaviours and shows how these alternative specifications affect the timing and scale of the economic impacts from anticipated and temporary tourism expenditure. The tourism shock analysed is of a scale expected for the Commonwealth Games to be held in Glasgow in 2014. The model shows how "pre-shock" and "legacy" effects - impacts before and after the shock - arise and their quantitative importance. Using the forward-looking model the paper calculates the optimal degree of pre-announcement.

Suggested Citation

  • Grant Allan & Patrizio Lecca & Kim Swales, 2014. "The impacts of temporary and anticipated tourism spending," Working Papers 1406, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:1406
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    File URL: http://www.strath.ac.uk/economics/research/discussionpapers/
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    Citations

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    Cited by:

    1. Massiani, Jerome, 2019. "CGE Analysis of Mega Events: A Timely Issue," Conference papers 333109, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Zhang, Cheng & Zhou, Xinxin & Zhou, Bo & Zhao, Ziwei, 2022. "Impacts of a mega sporting event on local carbon emissions: A case of the 2014 Nanjing Youth Olympics," China Economic Review, Elsevier, vol. 73(C).
    3. Claudio Calero & Lindsay W Turner, 2020. "Regional economic development and tourism: A literature review to highlight future directions for regional tourism research," Tourism Economics, , vol. 26(1), pages 3-26, February.
    4. Allan, Grant J. & Lecca, Patrizio & Swales, Kim, 2017. "The impacts of temporary but anticipated tourism spending: An application to the Glasgow 2014 Commonwealth Games," Tourism Management, Elsevier, vol. 59(C), pages 325-337.
    5. MASSIANI, Jérôme, 2022. "Computable General Equilibrium assessment of mega-events: Issues and possible solutions," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 920-942.
    6. Adeola, Ogechi & Evans, Olaniyi & Hilson, Ebo, 2018. "Tourism and economic wellbeing in Africa," MPRA Paper 93685, University Library of Munich, Germany.
    7. Massiani, Jérôme, 2018. "Assessing the economic impact of mega events using Computable General Equilibrium models: Promises and compromises," Economic Modelling, Elsevier, vol. 75(C), pages 1-9.

    More about this item

    Keywords

    economic impact; CGE modelling; mega-events;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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