Measuring the economic contribution of tourism to destinations within an input-output framework: some methodological issues

The input-output model is a traditional tool employed in the literature for measuring the contribution of an economic activity within a given territory. In the case of tourism, this methodological framework has been used to estimate the contribution of the tourism sector as a whole, and for specific products in the tourism market, such as cruise visits. The present paper computes the economic contribution of international tourism arriving at three major destinations on the Mediterranean coast of Spain; namely, Barcelona, Palma de Mallorca and Alicante. For each destination, both the country-level and regional-based input-output tables were employed, using the INTERTIO project, a regional input-output framework developed for the Spanish economy by the Lawrence Klein Institute of the Autonomous University of Madrid. The results show important differences in the magnitude of the computed economic effects between the country and regional approaches. To shed more light on the issue, we identify the main sources driving such dissimilar results, including the role of backward linkages of industries and the differing sectoral distributions of initial economic effects. Finally, we point to the role played by specific sectors in the model in amplifying the initial effects by using a centrality analysis of hub-and-authority effects. The methodological discussion in the paper helps to highlight the need for using the regional input-output model when available, and the other additional methodological tools we provide throughout the study for more accurately computing the economic impact of tourism for particular regions or destinations.