A Quantitative Framework for Assessing Public Investment in Tourism : An Application to Haiti

This study develops a linked regional computable general equilibrium and micro-simulation (RCGE-MS) model to assess the regional economy-wide and poverty impacts of a US$36 million investment in tourism in the south of Haiti. The first social accounting matrix for Haiti with a base year of 2012/2013 was constructed to calibrate the model. This research addresses three key gaps identified in the tourism impact assessment literature. First, a destination-specific tourism demand and value chain analysis was used to calibrate the shocks implemented in the model. Second, the RCGE-MS approach moves beyond the representative household configuration to enable more robust analysis of tourism investment impacts on poverty and income inequality. Third, results of this modelling were used to inform a social cost-benefit analysis to provide greater transparency in the evaluation of trade-offs between investment alternatives. Considering the investment and projected tourism demand, results show a positive impact on sectoral activity, especially for the hotel and restaurant sector (182.1% in 2040). The investment leads to a 2.0% increase in Gross Regional Product in 2040 compared with the baseline. The South Department’s exports are 4.7% below baseline in 2040 and imports are 6.1% higher due to the inflow of foreign exchange and the consequent appreciation of the regional real exchange rate, increased demand for most goods and services, and limited regional productive capacity. The rate of unemployment falls, beginning at 26% in 2013 and ending at 23.4% by 2040. The investment helps lift some of the poorest in the Haiti’s South out of poverty, reducing the poverty headcount by 1.6 percentage points. Driving this result is an increase in employment, the average wage and non-labor income. The linked RCGE-MS approach proves to be a powerful tool for assessing how tourism investments affect regional economic activity and revealing the mechanisms through which tourism can contribute to increase employment opportunities and reduce poverty.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Reconciliation Once and For All: Economic Impact Evaluation and Social Cost Benefit Analysis

This paper makes two contributions to the debate on the compatibility of social cost benefit analysis and economic impact analysis. First we argue that benefits estimated through economic impact analysis are amenable to subsequent analysis in a social cost benefit framework when household utility is used as the measure of welfare. Second, economic impact analysis and social cost benefit analysis of investment loans may be evaluated from the perspective of the multilateral lender and from that of the beneficiary government. While the first is straightforward to implement, this paper develops an approach to evaluating the investment from the perspective of the beneficiary government which internalizes the repayment of the loan within the economic impact model itself. We compare these two perspectives by undertaking an economic impact and social cost benefit analysis of a US$6.25 million tourism investment in Uruguay.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Reconciliation Once and For All: Economic Impact Evaluation and Social Cost Benefit Analysis

This paper makes two contributions to the debate on the compatibility of social cost benefit analysis and economic impact analysis. First we argue that benefits estimated through economic impact analysis are amenable to subsequent analysis in a social cost benefit framework when household utility is used as the measure of welfare. Second, economic impact analysis and social cost benefit analysis of investment loans may be evaluated from the perspective of the multilateral lender and from that of the beneficiary government. While the first is straightforward to implement, this paper develops an approach to evaluating the investment from the perspective of the beneficiary government which internalizes the repayment of the loan within the economic impact model itself. We compare these two perspectives by undertaking an economic impact and social cost benefit analysis of a US$6.25 million tourism investment in Uruguay.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Economic Assessment of Development Interventions in Data Poor Countries: An Application to Belize’s Sustainable Tourism Program

Ex-ante economic impact analyses are required to demonstrate the development impact and economic viability of loans and grants extended by multi-lateral development banks. These assessments are performed under tight time constraints and often in data poor environments. This paper develops a framework for assessing development interventions in data poor environments and applies it to the analysis of the Sustainable Tourism Program, a US$15 million loan from the Inter-American Development Bank to the Government of Belize to foster tourism development in emerging destinations and enhance participation of low income people in the tourism value chain. This paper contributes to the literature in two critical ways: (i) the paper develops a generalizable approach to building dynamic computable general equilibrium models for development policy analysis in data poor environments; (ii) realistic expectations of agent behavioral responses to development interventions are required to calibrate model simulations. To estimate business as usual tourism arrivals and expenditure, auto-regressive integrated moving average methods were used. To estimate agent response to the development intervention, a survey-based quasi-contingent valuation approach was employed. These projections and information on investment structuring and costs were used to calibrate the model shocks. Results of this analysis show that the proposed investment will have positive impacts on Belize’s economy by hastening economic growth. Gross domestic product increases 3% by 2040 and unemployment falls from 12% to 10%. Cross validating with a break-even scenario confirms that the Government of Belize would recover all investment costs even if actual agent demand response were considerably less than forecast. The model developed here may be applied to the ex-ante economic analysis of other sectoral development interventions ranging from agricultural policy to fiscal policy, from integration and trade, to health and education.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Economic Assessment of Development Interventions in Data Poor Countries: An Application to Belize’s Sustainable Tourism Program

Ex-ante economic impact analyses are required to demonstrate the development impact and economic viability of loans and grants extended by multi-lateral development banks. These assessments are performed under tight time constraints and often in data poor environments. This paper develops a framework for assessing development interventions in data poor environments and applies it to the analysis of the Sustainable Tourism Program, a US$15 million loan from the Inter-American Development Bank to the Government of Belize to foster tourism development in emerging destinations and enhance participation of low income people in the tourism value chain. This paper contributes to the literature in two critical ways: (i) the paper develops a generalizable approach to building dynamic computable general equilibrium models for development policy analysis in data poor environments; (ii) realistic expectations of agent behavioral responses to development interventions are required to calibrate model simulations. To estimate business as usual tourism arrivals and expenditure, auto-regressive integrated moving average methods were used. To estimate agent response to the development intervention, a survey-based quasi-contingent valuation approach was employed. These projections and information on investment structuring and costs were used to calibrate the model shocks. Results of this analysis show that the proposed investment will have positive impacts on Belize’s economy by hastening economic growth. Gross domestic product increases 3% by 2040 and unemployment falls from 12% to 10%. Cross validating with a break-even scenario confirms that the Government of Belize would recover all investment costs even if actual agent demand response were considerably less than forecast. The model developed here may be applied to the ex-ante economic analysis of other sectoral development interventions ranging from agricultural policy to fiscal policy, from integration and trade, to health and education.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Boosting Tourism’s Contribution to Growth and Development: Analysis of Evidence

In this study we develop an evidence-based tool to help to guide policy and investment choices, to maximize developmental returns from tourism. Specifically, we develop a tourism-extended social accounting matrix and computable general equilibrium and microsimulation models customized for tourism investment analysis. To demonstrate the approach, we develop these data structures for Belize, at both national and regional levels. The framework developed herein can be used to quantify the direct and indirect, and shortand long-run impacts of tourism investments. Anticipating application of the approach to tourism investment analysis in the Central American Region, we provide a stock take of the availability of data to develop a similar suite of models for other countries in the region.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Construcción de una matriz de contabilidad social para Argentina para el año 2018

En este trabajo, se describe el procedimiento que, utilizando los cuadros de oferta y utilización recientemente publicados por el INDEC, seguimos para la construcción de una Matriz de Contabilidad Social (MCS) para Argentina para el año 2018. La MCS resultante identifica 107 actividades, 223 productos, 11 factores de producción - incluyendo tres categorías de trabajo - y 6 hogares representativos. La MCS se construyó para ser utilizada como insumo para la calibración de IEEM (Integrated Economic-Environmental Modeling Platform), un modelo de equilibrio general computable extendido para considerar las interacciones, de ida y vuelta, entre la economía y el medio ambiente.Centro de Estudios Distributivos, Laborales y Sociale

Construction of an Extended Environmental and Economic Social Accounting Matrix from a Practitioner’s Perspective

In 2014, the United Nations published the first International Standard for environmental-economic statistics, known as the System of Environmental-Economic Accounting (SEEA).. As more countries adopt and implement the SEEA, the availability of consistent environmental and economic information increases the need for analytical tools that can use this data to respond to policy relevant questions. In this paper, we present a workflow to develop an environmentally-extended social accounting matrix, which can serve as the basic database for the development of environmentally-extended computable general equilibrium models. To illustrate, and given its comprehensive implementation of the SEEA, we apply this workflow to the Guatemalan case and the Integrated Economic-Environmental Modeling (IEEM) Platform.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

A Quantitative Framework for Assessing Public Investment in Tourism : An Application to Haiti

This study develops a linked regional computable general equilibrium and micro-simulation (RCGE-MS) model to assess the regional economy-wide and poverty impacts of a US$36 million investment in tourism in the south of Haiti. The first social accounting matrix for Haiti with a base year of 2012/2013 was constructed to calibrate the model. This research addresses three key gaps identified in the tourism impact assessment literature. First, a destination-specific tourism demand and value chain analysis was used to calibrate the shocks implemented in the model. Second, the RCGE-MS approach moves beyond the representative household configuration to enable more robust analysis of tourism investment impacts on poverty and income inequality. Third, results of this modelling were used to inform a social cost-benefit analysis to provide greater transparency in the evaluation of trade-offs between investment alternatives. Considering the investment and projected tourism demand, results show a positive impact on sectoral activity, especially for the hotel and restaurant sector (182.1% in 2040). The investment leads to a 2.0% increase in Gross Regional Product in 2040 compared with the baseline. The South Department’s exports are 4.7% below baseline in 2040 and imports are 6.1% higher due to the inflow of foreign exchange and the consequent appreciation of the regional real exchange rate, increased demand for most goods and services, and limited regional productive capacity. The rate of unemployment falls, beginning at 26% in 2013 and ending at 23.4% by 2040. The investment helps lift some of the poorest in the Haiti’s South out of poverty, reducing the poverty headcount by 1.6 percentage points. Driving this result is an increase in employment, the average wage and non-labor income. The linked RCGE-MS approach proves to be a powerful tool for assessing how tourism investments affect regional economic activity and revealing the mechanisms through which tourism can contribute to increase employment opportunities and reduce poverty.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Economic Assessment of Development Interventions in Data Poor Countries: An Application to Belize’s Sustainable Tourism Program

Ex-ante economic impact analyses are required to demonstrate the development impact and economic viability of loans and grants extended by multi-lateral development banks. These assessments are performed under tight time constraints and often in data poor environments. This paper develops a framework for assessing development interventions in data poor environments and applies it to the analysis of the Sustainable Tourism Program, a US$15 million loan from the Inter-American Development Bank to the Government of Belize to foster tourism development in emerging destinations and enhance participation of low income people in the tourism value chain. This paper contributes to the literature in two critical ways: (i) the paper develops a generalizable approach to building dynamic computable general equilibrium models for development policy analysis in data poor environments; (ii) realistic expectations of agent behavioral responses to development interventions are required to calibrate model simulations. To estimate business as usual tourism arrivals and expenditure, auto-regressive integrated moving average methods were used. To estimate agent response to the development intervention, a survey-based quasi-contingent valuation approach was employed. These projections and information on investment structuring and costs were used to calibrate the model shocks. Results of this analysis show that the proposed investment will have positive impacts on Belize’s economy by hastening economic growth. Gross domestic product increases 3% by 2040 and unemployment falls from 12% to 10%. Cross validating with a break-even scenario confirms that the Government of Belize would recover all investment costs even if actual agent demand response were considerably less than forecast. The model developed here may be applied to the ex-ante economic analysis of other sectoral development interventions ranging from agricultural policy to fiscal policy, from integration and trade, to health and education.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS