Whale Watching Worldwide

Generally in economics, ‘indirect’ expenditure is
generated when the business that earns the direct
expenditure then spends that revenue on goods
and services as inputs to their activities.
The 2001 IFAW report, however, uses a definition of
expenditure different to that used in the general
economic literature. The 2001 report, drawing on
conventions from previous assessments, defines
indirect expenditure as expenditure by the
participant which supports the whale watch trip. In
other words, costs such as accommodation,
transport and food not included in the ticket price.
Direct expenditure is expenditure on tickets and
items directly related to the trip itself.
This report adopts the methodology of the 2001
Report, both for the sake of consistency and
because this method reflects more closely a gross
expenditure benefit derived from whale watching
activity.
The fact that the costs incurred by the businesses
involved are not calculated has been a criticism of
this methodology in the past. However, this is more
a criticism of using the term economic values to be
something that it is not. In this case, the gross
expenditure calculated using the current
methodology and that of previous reports reflects
an important gross figure for economic activity due
to the existence of a whale watching industry. Like
the calculation of gross domestic product, the figure
is unashamedly gross, not net. It is therefore not an
inaccurate method for demonstrating the level of
economic contribution to a region or country.
A second criticism that has been offered of this
methodology is the issue of determining how much
additional expenditure (in this report termed
indirect expenditure) can be attributed to the whale
watching activity. For this report, a very
conservative percentage of average daily inbound
tourist expenditure was attributed to the whale
watching activity. This estimate is likely to
undervalue the total contribution of the whale
watcher to the local economy rather than overvalue
it, as the percentage used is usually well below
accepted tourism multipliers. Economists at Large
believe this is a strongly defensible methodology to
employ.
As noted above, this report adopts the same
approach as the 2001 IFAW report to allow direct
comparison with that report. Therefore, direct and
indirect expenditure are defined as follows:
Direct expenditure
The direct whale watch ticket purchase price paid
by participants. Where direct expenditure is
reported in the country summaries, it has been
determined by detailed modelling of operator
survey results, rather than by simply taking an
average ticket price and multiplying by the number
of whale watchers. The direct expenditure figure
calculated is determined by reference to whether
the whale watching activity is dedicated or
opportunistic as below:
For dedicated whale watching participants, 100% of
the ticket’s price is multiplied by the total number
of dedicated whale watchers purchasing said
tickets. Ticket price information is taken from
operator responses to surveys – where this is
unavailable, the data used is that available through
secondary sources, or an average price of a ticket
for the country as a whole. The ticket price is
separated into adult and children’s tickets, and the
appropriate price applied.
For opportunistic whale watching participants, in
general 50% of the ticket price is multiplied by the
number of opportunistic whale watchers,
accounting for the fact that whale watching is not
the primary reason for purchasing the ticket. In
some case where more detail was known, a more
precise proportion is attributed.
Indirect expenditure
The expenditure into the local economy that can be
attributed to the person participating in the whale
watch activity. In addition to direct expenditure on
the ticket, the other expenditure the whale watcher
makes on the day they undertake the whale
watching activity can in part be attributed to that
activity. For example, a tourist may undertake a
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