Tourism Input-Output Analysis

Tourism input-output analysis applies Wassily Leontief's inter-industry framework to measure how tourist spending reverberates through an entire economy. An input-output table records, sector by sector, how much each industry buys from every other industry to produce its output. By treating tourism expenditure as a final-demand shock to this system of linkages and inverting the Leontief matrix, the analyst captures not only the direct output of the businesses visitors patronise but also the indirect demand placed on their suppliers, and the suppliers' suppliers, throughout the production chain. John Fletcher's 1989 article established the rigorous tourism application of this method, and Dwyer, Forsyth and Spurr's 2004 comparison set out both its strengths as an impact tool and the assumptions that distinguish it from computable general equilibrium analysis.