Regional economic effect and ideal economic scale of tourism

This study estimates the economic impact of local tourist spending through its multiplier effect and develops a method to estimate the ideal economic scale of local tourist industry. We conducted quarterly survey of tourist spending in Yuri, Akita during 2006. Using survey data, we first estimate the actual scale of tourist industry in Yuri, and find that it is approximately 20 billion. Further, we identify an ideal tourist, who spends relatively more than others, by regressing tourists expenditure on their various attributes. Assuming that all visitors are ideal tourists, we estimate the ¿ideal scale¿ of the economic impact. The result shows that the estimated ideal economic scale is about 40 billion, which is approximately twice the actual scale. The developed methodology is applicable to other region and will be useful for policymakers, who are interested in enhancing regional economy through tourism.