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The potential local and regional impacts of COVID-19 in New Zealand with a focus on tourism

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  • Leroy de Morel, Laetitia
  • Wittwer, Glyn
  • Gamperle, Dion
  • Leung, Christina

Abstract

Due to the on-going global COVID-19 pandemic, there is a growing concern regarding its potential impacts on economies. With restrictions on entry and movements imposed by most countries, the tourism industry is particularly at risk. In New Zealand, where tourism contributes 5.8 percent to the national GDP and represents 20 percent of national exports, businesses in the tourism industry are already starting to see the effects of the latest travel restrictions imposed by the government. We present a CGE modelling application with a disaggregated tourism sector in our database to explore the potential impacts of COVID-19 on tourism for the local, regional and national New Zealand economies. In this paper, we focus on New Zealand’s major urban areas and tourist destinations in New Zealand, and we use a multi-regional bottom-up computable general equilibrium (CGE) model based on the original TERM model (Wittwer 2012, 2017). TERM-NZ is calibrated using Statistics NZ’s 2013 Input-Output tables and updated with the latest National Accounts available. The model database has been extended so that it contains information on 149 industries, 149 commodities and 88 districts. This includes 67 territorial authorities across New Zealand plus, within Auckland, 21 local community boards. It includes a tourism sector that can distinguish between domestic tourism, foreign tourism and foreign students. We also provide an overview of the methodology we used to prepare the TERM-NZ database, focusing on tourism industries and regional detail. We use a 54-sector, 10-region aggregation of the model to simulate the effects of the ongoing COVID-19 pandemic. To this extent, we model three scenarios, each representing a different level of alert defined by the New Zealand government and associated with different degrees of foreign and domestic travel restrictions, including a travel ban, borders closures and confinement.

Suggested Citation

  • Leroy de Morel, Laetitia & Wittwer, Glyn & Gamperle, Dion & Leung, Christina, 2020. "The potential local and regional impacts of COVID-19 in New Zealand with a focus on tourism," Conference papers 333207, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333207
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    References listed on IDEAS

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    2. Glyn Wittwer, 2020. "The 2019-20 Australian Economic Crisis Induced by Bushfires and COVID-19 from the Perspective of Grape and Wine Sectors," Centre of Policy Studies/IMPACT Centre Working Papers g-299, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. J. A. Giesecke & W. J. Burns & A. Barrett & E. Bayrak & A. Rose & P. Slovic & M. Suher, 2012. "Assessment of the Regional Economic Impacts of Catastrophic Events: CGE Analysis of Resource Loss and Behavioral Effects of an RDD Attack Scenario," Risk Analysis, John Wiley & Sons, vol. 32(4), pages 583-600, April.
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