Modelling economic impact for national governments

BU researchers have developed economic modelling techniques to more accurately predict the outcome of events, policies or other major economic decisions. The technique has been applied internationally, including informing estimates of the value of the 2012 Olympic Games.

Professor John Fletcher and Professor Adam Blake have pioneered new approaches to estimate the economic impacts of tourism activities.

Economic impact research has evolved since the 1970s with the use of input/output models. These typically estimate static economic impacts that are limited in their applicability. Professors Fletcher and Blake have been instrumental in extending and enhancing economic impact modelling in the following ways:

  • The incorporation of the role of displacement, by which tourism activity displaces other forms of activity through developments of computable general equilibrium (CGE) models.
  • The use of dynamic models to allow impacts of future events to be seen before they take place.
  • The incorporation of forecasting functions and environmental impact modules in user-friendly interfaces and web interfaces.

London 2012 Olympics

Professor Blake’s work on dynamic modelling of tourism demand during the Olympics developed new methodologies for estimating the impact of future events. This accounts for the fact that businesses and other actors in the economy anticipate these events and make changes to their activity many years in advance.

The model developed by Blake was used to estimate the value of the London 2012 Olympics to the UK.  It also showed the value of the post-Olympic tourism legacy and economic gains that would be made by London partly at the expense of the rest of the UK.

These findings contributed to the evidence base that led to policy changes, such as promoting the need for destination image building during the Games and of spreading the tourism benefits around the UK. This was delivered through the work of the Nations and Regions Group, who identified opportunities for tourism outside of London.

Year of Natural Scotland

Professor Blake led a research project commissioned by the Scottish Government to estimate the size and economic contribution of wildlife tourism in Scotland. This involved the estimation of net impacts of tourism, taking account of displacement.

This project estimated that wildlife tourists spent £276 million in Scotland during 2009, which contributed £65 million to Scotland’s gross domestic product (GDP) and 2,763 full-time equivalent jobs. This provided the evidence base which has led to VisitScotland naming 2013 the Year of Natural Scotland.

Government of Gibraltar

Since the 1980s the UK Government and the Government of Gibraltar have used the economic models developed by Fletcher to determine the impact of various changes.

These include the closure of HMS Dockyard; the closure of the Royal Naval Hospital; the development of Gibraltar Ship Repair; the opening of the frontier with Spain; the appeal against EU judgements on regional selectivity with respect to Corporation Tax Rates; the operation of off-shore economic activities; and the management of its online gaming industry. The Chamber of Commerce have also used the research models to evaluate the economic impact of Gibraltar’s economy on that of the Campo de Gibraltar.

Publications

  • Blake, A., Arbache, J.S., Sinclair, M.T., Teles, V., 2008. Tourism and poverty relief. Annals of Tourism Research 35 (1), 107-126.
  • Blake, A. (2008). ‘Tourism and income distribution in East Africa’, International Journal of
  • Tourism Research, 10(6):511-524.
  • Blake, A., 2009. The Dynamics of Tourism’s Economic Impact. Tourism Economics, 15(3), 615-628.
  • Li, S., A. Blake and C. Cooper, 2010. ‘Chinese Tourism Policy and the Economic Impact of International Tourism on the Chinese Economy:  a computable general equilibrium scenario analysis of the Beijing 2008 Olympic Games’, Tourism Economics, 17(2):279-304.
  • Li, S., A. Blake and C. Cooper, 2010. ‘China’s Tourism in a Global Financial Crisis: a Computable General Equilibrium Approach’, Current Issues in Tourism 13(5): 435–453.
  • Li, S., A. Blake and R. Thomas, 2013. ‘Modelling the economic impact of sports events: the case of the Beijing Olympics’, Economic Modeling, 30:235-244.