The economic impact of tourism in a small region: a general equilibrium analysis applied to Ushuaia Online publication date: Mon, 22-Nov-2021
by Carlos Adrián Romero; Juan Pablo Tarelli; Juan Ignacio Mercatante
International Journal of Tourism Policy (IJTP), Vol. 11, No. 4, 2021
Abstract: The impact of tourism on local Argentine economies is quite significant. An increase in tourism can improve the well-being of the inhabitants and enhance the region's economic performance. However, the lack of specific information is a serious problem when it comes to regional analysis. In this study we have created a social accounting matrix (SAM) for the city of Ushuaia and apply it to calibrate a computable general equilibrium (CGE) model to study a pro-tourism policy: public investment in advertising to promote tourism. In this case, we find that this type of policy increases regional gross domestic product (GDP) by 1.6%, tax collection by 0.55% and boosts sectoral activity for tourism and non-tourism sectors alike. We also conclude that policymakers in Ushuaia should consider foreign visitors who generate higher revenue than local visitors. Nevertheless, diversification should not be forgotten.
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