The economic impact of tourism in a small region: a general equilibrium analysis applied to Ushuaia

JUAN IGNACIO MERCATANTE; JUAN TARELLI; CARLOS ADRIÁN ROMERO

International Journal of Tourism Policy

Inderscience Enterprises

Lugar: Ginebra; Año: 2022 vol. 11 p. 335 - 354

1750-4090

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.