Edited by Larry Dwyer and Peter Forsyth
Chapter 14: CGE Tourism Analysis and Policy Modeling
14 CGE tourism analysis and policy modelling Adam Blake, Jonathan Gillham and M.Thea Sinclair Introduction Computable general equilibrium (CGE) models are eminently suited to tourism analysis and policy, given their multi-sectoral basis and ability to examine a wide range of actual and counter-factual scenarios. In contrast to partial equilibrium approaches, CGE models can take account of the interrelationships among tourism, other sectors in the domestic economy and foreign producers and consumers. The modelling can be tailored to alternative conditions, such as ﬂexible or ﬁxed prices, alternative exchange rate regimes, differences in the degree of mobility of factors of production and different types of competition. CGE tourism models are particularly helpful to policy makers, who can use them to provide guidance about a wide variety of ‘What if ?’ questions, concerning the range of domestic or international shocks or policy scenarios that can arise. Given CGE models’ versatility and long-standing acceptance and use within the ﬁeld of international trade and development (Deverajan et al. 1982; de Melo 1988; Shoven and Whalley 1992; François et al. 1996), it is surprising that their application to tourism has been relatively recent and limited in geographical scope. Much of the pioneering work on CGE tourism modelling was undertaken in Australia, with additional research being largely concentrated in the UK and North America, following earlier studies that paved the way for CGE modelling by using the input–output (I–O) approach. Further use of CGE models has been facilitated by the development of Tourism Satellite...
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