Geography Reference
In-Depth Information
ECONOMIC ANALYSIS
Within tourism and recreation research, 'until recently, attention has concentrated on the
more obvious economic impacts with comparatively little consideration being given to
the environmental and social consequences of tourism' (Mathieson and Wall 1982:3-4).
However, considerable debate has arisen over methodological problems in the economic
analysis of tourism, including the hosting of events (see below), particularly in the
measurement of tourism as an economic activity, through the use of satellite accounts,
economic multipliers and cost-benefit analysis (Archer 1976, 1977a, 1977b, 1984;
Murphy 1985; D.G.Pearce 1989; S.L.J.Smith 1994, 2000; S.L.J.Smith and Wilton 1997;
World Tourism Organization 1999; Sinclair et al. 2003), the evaluation of opportunity
cost (Vaughan 1977) and the relationship of tourism and recreation to regional
development and employment (Royer et al. 1974; Doering 1976; Frechtling 1976b;
Hudman 1978; Ellerbrook and Hite 1980; Williams and Shaw 1988; Sinclair 1998).
Many economic impact studies focus on what is known as the 'multiplier effect'. This
effect is concerned with 'the way in which expenditure on tourism filters throughout the
economy, stimulating other sectors as it does so' (D.G.Pearce 1989:205). Several
different types of multiplier are in use, each with their own emphasis (Archer 1977a,
1977b, 1982). However, the multiplier may best be regarded as 'a coefficient which
expresses the amount of income generated in an area by an additional unit of tourist
spending' (Archer 1982:236). It is the ratio of direct and secondary changes within an
economic region to the direct initial change itself. In this context geographers have not
played a major role, although multiplier analysis is not devoid of a spatial component
with its linkage to regional science and its spatial concerns for quantitative analysis of
areas and locations. In some cases, geographers have not pursued the regional analytical
approaches of the economists in measuring and analysing tourist activity in a spatial
context due to the prevailing geographic paradigms in human geography, with such
approaches instead being located more in the bounds of regional science research.
Although economic geography has overlapped with economics in some cases, tourism
and recreation is not an area where this occurred on a wide scale (Ioannides 1995;
Ioannides and Debbage 1998) although the publication of the journal
Tourism Economics
has arguably led to greater cross-disciplinary engagement. Likewise, collaborative
research between geographers and economists has not emerged as a theme in research
until the mid-1990s (Martin 1999; G.Clark et al. 2000). This is often because each subject
area has its own concepts, language, approach and few obvious intersections in the
research field because tourism and recreation remained a fringe area for research in the
1960s and 1970s for both geographers and economists.
The economic impacts of tourism and recreation are usually classified as being either
primary or secondary in nature (Archer 1982). Primary or direct impacts are those
economic impacts which are a direct consequence of visitor spending (e.g. the purchase
of food and beverages by a tourist in a hotel). Secondary impacts may be described as
being either indirect or induced. Indirect impacts are those arising from the response of
money in the form of local business transactions (e.g. the new investment of hotel owners
in equipment and supplies). Induced impacts are those arising from the additional income
