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Introduction
The conceptual rationale for economic impact studies of tourism events and facilities is illustrated in the figure. It shows that residents and visitors in a community give funds to the city council (or other public jurisdiction) in the form of taxes. The city council uses a proportion of these funds to subsidize tourism events, promotions, activities or facilities that attract out-of-town visitors who spend money in the local community. This new money from outside the community creates income and jobs for residents. This completes the virtuous cycle of economic development (Crompton, 1995).
Past perspective
The concept of new money being spent and re-spent in a community so its initial impact is multiplied is easy to grasp, but it is difficult to measure. The earliest approaches for estimating secondary impacts were input–output (I-O) models, and in the contemporary US context they remain dominant. They were originally developed in a national context (Leontief, 1936, 1937, 1941), while the earliest efforts to measure secondary impacts in tourism pioneered by Archer and Owen (1971); Archer (1975, 1977, 1982, 1984) were applied in a regional context.
Constructing I-O models was a laborious, complex, and expensive task undertaken by highly trained economists, so relatively few empirical studies in tourism emerged in the 1970s and 1980s. The situation changed dramatically in the United States in the 1990s with the emergence of the IMPLAN (Impact Analysis for Planning) system. This system has been consistently refined over the past 25 years. However, it is confined to the US, so tourism...