OECD Culture and Local Development.pdf - PACA

2. LOCAL DEVELOPMENT BASED ON ATTRACTING VISITORS AND TOURISTS
- It also assumes that all income received results in an equivalent amount of
purchases of goods and services, which will not be true if earners save a portion
of their incomes.
With due regard to these sources of leakage, initial purchases result in indirect
and then in induced purchases. In the case of tourists arriving in a territory to visit a
site or to attend an event, the direct effect lies in their purchases; the indirect effect,
in those of the businesses they purchase from; and the induced effect, in the successive
waves of spending thus unleashed. The multiplier will be expressed by the ratio of
two variants: (1) the characteristic economic size of the territory: output, income,
employment or even public revenues; and (2) the cultural and tourist spending that
is triggered. Three multipliers are used: the Keynesian multiplier, the ad hoc multiplier,
and the input-output multiplier.
The Keynesian-type multiplier
The Keynesian multiplier, k, is formulated in terms of revenues, thus:
k = 1 / 1- c = 1 / s + m
where:
• k represents the value of the multiplier.
• c is the propensity to consume.
• s and m are the propensity to save and propensity to import, i.e. leakages (See
Annex 1.1).
These multipliers are generally estimated at the national level. There are many
illustrations for the area of tourism receipts, although not for “cultural tourism”.
Table 2.1 provides a few examples. It shows that this multiplier varies inversely with
the degree of territorial integration. Thus it is much higher for the United Kingdom
than it is for Egypt or Mauritius, where tourism goods are typically imported.
At the local level, estimating these multipliers is a complicated affair, subject to
several difficulties (see section on “Methodological Issues”). The current benchmark
Table 2.1. Value of tourism multipliers at the national level
United Kingdom 1.73
Republic of Ireland 1.71
Egypt 1.23
Cyprus 1.14
Mauritius 0.97
Source: Cooper, CH. & al. (1998), Tourism: Principles and Practice, Longman, pp. 142-143
CULTURE AND LOCAL DEVELOPMENT - ISBN 92-64-00990-6 - © OECD 2005 57