Hostname: page-component-7479d7b7d-qs9v7 Total loading time: 0 Render date: 2024-07-11T02:37:01.910Z Has data issue: false hasContentIssue false
  • English
  • Français

Evaluating the Economic Viability of Public Investments in Tourism

Published online by Cambridge University Press:  05 November 2019

Onil Banerjee Open the ORCID record for Onil Banerjee [Opens in a new window] ,
Martin Cicowiez  and
Adela Moreda
Onil Banerjee*
Affiliation:
Environment, Rural Development, Environment, and Disaster Risk Management Division, Inter-American Development Bank, 1300 New York Avenue N.W., Washington, DC20577, USA, e-mail: onilb@iadb.org
Martin Cicowiez
Affiliation:
Facultad de Ciencias Económicas, Universidad Nacional de la Plata, Calle 6 Entre 47 y 48, 3er Piso, Oficina 312, 1900 La Plata, Argentina
Adela Moreda
Affiliation:
Environment, Rural Development, Environment, and Disaster Risk Management Division, Inter-American Development Bank, 1300 New York Avenue N.W., Washington, DC20577, USA
*
*e-mail: onilb@iadb.org
Get access Rights & Permissions [Opens in a new window]

Abstract

Various methods have been applied to evaluating the economic viability of public investments in tourism. In this article, we capitalize on the strengths of computable general equilibrium and cost-benefit analytical techniques and develop an integrated approach to evaluating public investments in tourism. We apply the approach to the evaluation of a US$6.25 million investment in tourism in Uruguay from the perspective of a multilateral development bank and a beneficiary government. These perspectives differ in a cost-benefit analysis (CBA) due to the timing of the costs incurred. The integrated approach is powerful in that it captures first and subsequent rounds of investment impacts of benefits and costs; resource diversion and constraints are accounted for, and the estimation of benefits is consistent with the welfare economics underpinnings of CBA.

Keywords

cost-benefit analysisdynamic computable general equilibrium modelex ante economic impact analysispublic investment analysistourismUruguaywelfare economics.Z3C68D61O1O2O5
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 11 , Issue 1 , Spring 2020 , pp. 101 - 130
Copyright
© Society for Benefit-Cost Analysis, 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aguiar, A., Narayanan, B., and McDougall, R. 2016. “An Overview of the GTAP 9 Database.” Journal of Global Economic Analysis, 1: 28.CrossRefGoogle Scholar
Abelson, P. 2011. “Evaluating Major Events and Avoiding the Mercantilist Fallacy*. Economic Papers.” A journal of applied economics and policy, 30, 48–59.Google Scholar
Anaya, Bucheli, and Rodríguez-Villamil , Cecilia González. 2012. “An Estimation of the Wage Curve for Uruguay.” Cuadernos de Economía, 31: 253–270.Google Scholar
Arrow, K. J. 2005. “Personal Reflections on Applied General Equilibrium Models.” In Frontiers in Applied General Equilibrium Modeling: In Honor of Herbert Scarf, edited by Kehoe, T. J., Srinivasan, T. N., and Whalley, J. Cambridge, UK: Cambridge University Press.Google Scholar
Arrow, K. J., Dasgupta, P., Goulder, L. H., Mumford, K. J., and Oleson, K. 2012. “Sustainability and the Measurement of Wealth.” Environment and Development Economics, 17: 317–353.CrossRefGoogle Scholar
Banerjee, O., and Alavalapati, J. R. R. 2014. “Forest Policy Modelling in an Economy-Wide Framework.” In Handbook of Forest Resource Economics, edited by Kant, S., and Alavalapati, J. R. R. London, UK: Taylor & Francis.Google Scholar
Banerjee, O., Alavalapati, J. R. R., and Lima, E. 2016a. “A Framework for Ex-ante Analysis of Public Investment in Forest-Based Development: An Application to the Brazilian Amazon.” Forest Policy and Economics, 73: 204–214.CrossRefGoogle Scholar
Banerjee, O., and Cicowiez, M. 2019. Frontiers in the Economic Analysis of Public Investment in Tourism (In Preparation).Google Scholar
Banerjee, O., Cicowiez, M., and Cotta, J. 2016b. “Economics of Tourism Investment in Data Scarce Countries.” Annals of Tourism Research, 60: 115–138.CrossRefGoogle Scholar
Banerjee, O., Cicowiez, M., and Dudek, S.. 2019a. Integrating Feedbacks Between Ecosystem Service Supply and Economic Systems: An Application of the IEEM+ESM Platform to the SDGs in Guatemala. Washington, DC: Inter-American Development Bank (in preparation).Google Scholar
Banerjee, O., Cicowiez, M., and Gachot, S. 2015. “A Quantitative Framework for Assessing Public Investment in Tourism – An Application to Haiti.” Tourism Management, 51: 157–173.CrossRefGoogle Scholar
Banerjee, O., Cicowiez, M., Horridge, J. M., and Vargas, R. 2019b. “Evaluating Synergies and Trade-offs in Achieving the SDGs of Zero Hunger and Clean Water and Sanitation: An Application of the IEEM Platform to Guatemala.” Ecological Economics, 161: 280–291.CrossRefGoogle Scholar
Banerjee, O., Cicowiez, M., Horridge, M., and Vargas, R. 2016c. “A Conceptual Framework for Integrated Economic–Environmental Modeling.” The Journal of Environment & Development, 25: 276–305.CrossRefGoogle Scholar
Banerjee, O., Cicowiez, M., Morris, E. J., and Moreda, A. 2018. “Boosting Tourism’s Contribution to Growth and Development: Analysis of the Evidence.” Review of Development Economics, 22: 1296–1320.CrossRefGoogle Scholar
Banerjee, O., Cicowiez, M., Vargas, R., and Horridge, J. M. 2019c. “The SEEA-Based Integrated Economic-Environmental Modelling Framework: An Illustration with Guatemala's Forest and Fuelwood Sectors.” Environmental and Resource Economics, 72 1: 539–558.CrossRefGoogle Scholar
Bartik, T. J. 2012. “Including Jobs in Benefit-Cost Analysis.” Annual Review of Resource Economics, 4: 55–73.CrossRefGoogle Scholar
Blake, A. 2005. “The Economic Impact of the London 2012 Olympics.” Report for the Department of Culture, Media, and Sport and the London Development Agency, London. London, UK: Department of Culture, Media, and Sport and the London Development Agency.Google Scholar
Blanchflower, D. G., and Oswald, A. J. 1994. “Estimating a Wage Curve for Brittan: 1973–90.” Economic Journal, 104: 1025–1043.CrossRefGoogle Scholar
Blanchflower, D. G., and Oswald, A. J. 2004. “Well-Being Over Time in Britain and the USA.” Journal of Public Economics, 88: 1359–1386.CrossRefGoogle Scholar
Burfisher, M. E. 2017. Introduction to Computable General Equilibrium Models, 2nd ed. Cambridge, UK: Cambridge University Press.Google Scholar
Burgan, B., and Mules, T. 2001. “Reconciling Cost-Benefit and Economic Impact Assessment for Event Tourism.” Tourism Economics, 7: 321–330.CrossRefGoogle Scholar
Cattaneo, A. 2002. Balancing Agricultural Development and Deforestation in the Brazilian Amazon. Research Report. Washington, DC: International Food Policy Research Institute.Google Scholar
Champ, P. A., Boyle, K. J., and Brown, T. C. 2003. A Primer on Nonmarket Valuation . Dordrecht, The Netherlands; Boston, MA: Kluwer Academic Publishers.CrossRefGoogle Scholar
Cicowiez, M. 2016. Nota Técnica: Construcción de una Matriz de Contabilidad Social para Uruguay para el Año 2013. IDB Project Document. Washington, DC: Inter-American Development Bank.Google Scholar
Dixon, P., and Jorgenson, D. W., eds. 2012. Handbook of Computable General Equilibrium Modeling. Oxford, UK: Elsevier.Google Scholar
Dixon, P. B., Parmenter, B. R., Powell, A., and Wilcoxen, P. J. 1992. Notes and Problems in Applied General Equilibrium Economics. Amsterdam, Netherlands: North-Holland .Google Scholar
Dixon, P. B., and Rimmer, M. T. 2002. Dynamic General Equilibrium Modelling for Forecasting and Policy: A. Practical Guide and Documentation of MONASH. Amsterdam, Netherlands: North-Holland .Google Scholar
Dixon, P. B., Rimmer, M. T., and Waschik, R. 2017. “Linking CGE and Specialist Models: Deriving the Implications of Highway Policy Using USAGE-Hwy .” Economic Modelling, 66: 1–18.CrossRefGoogle Scholar
Dwyer, L., Forsyth, P., and Spurr, R. 2005. “Assessing the Economic Impacts of Events: A Computable General Equilibrium Approach.” Journal of Travel Research, 45: 59– 66.CrossRefGoogle Scholar
Dwyer, L., Forsyth, P., and Spurr, R. 2003. “Inter-Industry Effects of Tourism Growth: Implications for Destination Managers.” Tourism Economics, 9: 117–132.CrossRefGoogle Scholar
Dwyer, L., Jago, L., and Forsyth, P. 2016. “Economic Evaluation of Special Events: Reconciling Economic Impact and Cost-Benefit Analysis.” Scandinavian Journal of Hospitality and Tourism, 16: 115–129.CrossRefGoogle Scholar
Eugenio-Martin , J. L., and Inchausti-Sintes , F. 2016. Programa de Desarrollo de Corredores Turisticos UR-L1113. Anexo, Analisis Economico Ex-Ante. Washington, DC: Inter-American Development Bank.Google Scholar
European Commission, Food and Agriculture Organization, International Monetary Fund, Organisation for Economic Cooperation and Development, United Nations, and World Bank. 2009. System of National Accounts 2008. EC, IMF, OECD, UN, WB.Google Scholar
European Commission, Food and Agriculture Organization, International Monetary Fund, Organisation for Economic Cooperation and Development, United Nations, and World Bank. 2012. System of Environmental-Economic Accounting. Central Framework. EC, FAO, IMF, OECD, UN, WB.Google Scholar
Hanley, N., and Spash, C. L. 1993. Cost-Benefit Analysis and the Environment . Cheltenham, UK: Edward Elgar.Google Scholar
Harrison, G., and Vinod, H. 1992. “The Sensitivity Analysis of Applied General Equilibrium Models: Completely Randomized Factorial Sampling Designs.” The Review of Economics and Statistics, 74: 357–362.CrossRefGoogle Scholar
Johnston, R. J., Boyle, K. J., Adamowicz, W., Bennett, J., Brouwer, R., Cameron, T. A., Hanemann, W. M., et al. 2017. “Contemporary Guidance for Stated Preference Studies.” Journal of the Association of Environmental and Resource Economists, 4: 319–405.CrossRefGoogle Scholar
Jones, R. W. 1965. “The Structure of Simple General Equilibrium Models.” The Journal of Political Economy, 73: 557–572.CrossRefGoogle Scholar
King, B. B. 1985. “What is SAM?” In Social Accounting Matrices: A Basis for Planning, edited by Pyatt, G., and Round, J. Washington, DC: World Bank.Google Scholar
Lange, G.-M., Wodon, Q., and Carey, K., eds. 2018. The Changing Wealth of Nations 2018: Building a Sustainable Future. Washington, DC: World Bank.CrossRefGoogle Scholar
Layman, B. 2004. “CGE Modelling as a Tool for Evaluating Proposals for Project Assistance: A View from the Trenches.” In Forth Biennial Regional Modelling Workshop in Melbourne: Policy Applications of Regional CGE Modelling. Melbourne, Australia: University of Western Australia.Google Scholar
Lofgren, H., Harris, R. L., Robinson, S., Thomas, M., and El-Said , M. 2002. A Standard Computable General Equilibrium (CGE) Model in GAMS. Washington, DC: IFPRI.Google Scholar
Ministerio de Turismo. 2018. Anuario 2018: Estadisticas de Turismo. Montevideo, Uruguay: Ministerio de Turismo.Google Scholar
Ministerio de Turismo. 2019. Turismo Receptivo. Datos Trimestrales. Montevideo: Ministerio de Turismo.Google Scholar
Mishan, E. J. 1988. Cost-Benefit Analysis. London, UK: Unwin Hyman.Google Scholar
Moreda, A., Hintze, L. H., Banerjee, O., Valle, Y., Levy, D., Rauschert, N., Salazar, D., Bachino, F., and Maya, V. 2017. “Línea de Crédito Condicional Para el Desarrollo Nacional del Turismo (UR-O1149).” In Primera Operación Individual: Programa de Desarrollo de Corredores Turísticos (UR-L1113). Propuesta para el Desarrollo de la Operación. Washington, DC: Inter-American Development Bank.Google Scholar
Pearce, D. W., Atkinson, G., and Mourato, S. 2006. Cost-Benefit Analysis and the Environment: Recent Developments. Paris, France: OECD.Google Scholar
Polasky, S., Bryant, B., Hawthorne, P., Johnson, J., Keeler, B., and Pennington, D. 2015. “Inclusive Wealth as a Metric of Sustainable Development.” Annual Review of Environment & Resources, 40: 445–466.CrossRefGoogle Scholar
Pyatt, G., and Round, J., eds. 1985. Social Accounting Matrrices: A Basis for Planning. Washington, DC: The World Bank.Google Scholar
Robinson, S. 1989, “Multisectoral Models.” In Handbook of Development Economics, edited by Chenery, Hollis and Srinivasan, T. N.. Amsterdam, Netherlands: Elsevier.Google Scholar
Stiglitz, J. E., Sen, A. K., and Fitoussi, J. P. 2010. Mis-Measuring Our Lives: Why GDP Doesn’t Add Up. New York, NY: New Press.Google Scholar
Taylor, J. E. 2010. Technical Guidelines for Evaluating the Impacts of Tourism Using Simulation Models. Impact Evaluation Guidelines. Washington, DC.Google Scholar
Taylor, J. E., and Filipski, M. J. 2014. Beyond Experiments in Development Economics: Local Economy-Wide Impact Evaluation. Oxford, UK: Oxford University Press.CrossRefGoogle Scholar
UNWTO. 2014. “Computable General Equilibrium Modelling for Tourism Policy-Inputs and Outputs.” In Statistics and TSA Issues Paper Series. Madrid, Spain: United Nations World Tourism Organization.Google Scholar
WTTC. 2019. Travel & Tourism: Economic Impact 2018 Uruguay. Economic Impact. London, UK: World Travel and Tourism Council.Google Scholar
Supplementary material: File

Banerjee et al. supplementary material

Banerjee et al. supplementary material

Download Banerjee et al. supplementary material(File)
File 95.1 KB