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Estimating the Multiplier Effects of Tourism Expenditures on a Local Economy through a Regional Input-Output Model

Endre Horváth and Douglas C. Frechtling, 1999

Tourism benefits regional economies through increased output, labor earnings and employment. Tourism multipliers embody the total increase in output, labor earnings and employment through interindustry linkages in a region as a result of tourism expenditures. The RIMS II regional input-output model was employed to estimate the multiplier effects of visitor expenditures in Washington, D.C. Both normal and ratio multipliers were analyzed, and the latter was found to be a more reliable indicator of total impact. A comparison of multipliers for 37 industries and the tourism sector in the city shows that tourism ranks relatively high in terms of output and labor earnings generated. These findings suggest recommendations for the economic growth and development of Washington, D.C.

 

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