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


  • Onil Banerjee

    (Infrastructure and Environment Sector - IDB)

  • Martin Cicowiez



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.

Suggested Citation

  • Onil Banerjee & Martin Cicowiez, 2015. "A Quantitative Framework for Assessing Public Investment in Tourism- An Application to Haiti," CEDLAS, Working Papers 0180, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0180

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    References listed on IDEAS

    1. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    2. Onil Banerjee, 2015. "Investing in recovering water for the environment in Australia's Murray-Darling Basin," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 31(4), pages 701-717, December.
    3. Luc Savard, 2005. "Poverty and Inequality Analysis within a CGE Framework: A Comparative Analysis of the Representative Agent and Microsimulation Approaches," Development Policy Review, Overseas Development Institute, vol. 23(3), pages 313-331, May.
    4. Rob Vos & Marco V. Sánchez, 2010. "A non-parametric microsimulation approach to assess changes in inequality and poverty," International Journal of Microsimulation, International Microsimulation Association, vol. 3(1), pages 8-23.
    5. Luc Savard, 2003. "Poverty and Income Distribution in a CGE-Household Micro-Simulation Model: Top-Down/Bottom Up Approach," Cahiers de recherche 0343, CIRPEE.
    6. Nabil Annabi & John Cockburn & Bernard Decaluwé, 2006. "Functional Forms and Parametrization of CGE Models," Working Papers MPIA 2006-04, PEP-MPIA.
    7. Michael Lahr, 2001. "Reconciling Domestication Techniques, the Notion of Re-exports and Some Comments on Regional Accounting," Economic Systems Research, Taylor & Francis Journals, vol. 13(2), pages 165-179.
    8. Bjarne Madsen & Chris Jensen-Butler, 1999. "Make and Use Approaches to Regional and Interregional Accounts and Models," Economic Systems Research, Taylor & Francis Journals, vol. 11(3), pages 277-300.
    9. Almeida dos Reis, Jose Guilherme & Paes de Barros, Ricardo, 1991. "Wage inequality and the distribution of education : A study of the evolution of regional differences in inequality in metropolitan Brazil," Journal of Development Economics, Elsevier, vol. 36(1), pages 117-143, July.
    10. Taylor, J. Edward & Filipski, Mateusz J., 2014. "Beyond Experiments in Development Economics: Local Economy-wide Impact Evaluation," OUP Catalogue, Oxford University Press, number 9780198707882.
    11. Klytchnikova, Irina & Dorosh, Paul, 2012. "Tourism sector in Panama : regional economic impacts and the potential to benefit the poor," Policy Research Working Paper Series 6183, The World Bank.
    12. Blake, Adam & Arbache, Jorge Saba & Sinclair, Thea & Teles, Vladimir Kuhl, 2010. "Tourism and poverty relief," Textos para discussão 237, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    13. Randall Jackson, 1998. "Regionalizing National Commodity-by-Industry Accounts," Economic Systems Research, Taylor & Francis Journals, vol. 10(3), pages 223-238.
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    Cited by:

    1. Onil Banerjee & Martin Cicowiez & Thomas Ochuodho & Michel Masozera & Bernabas Wolde & Pankaj Lal & Sebastian Dudek & Janaki R.R. Alavalapati, 2017. "Financing the Sustainable Management of Rwanda’s Protected Areas," CEDLAS, Working Papers 0211, CEDLAS, Universidad Nacional de La Plata.
    2. Onil Banerjee & Martín Cicowiez & Jamie Cotta, 2016. "Economic Assessment of Development Interventions in Data Poor Countries: An Application to Belize’s Sustainable Tourism Program," CEDLAS, Working Papers 0194, CEDLAS, Universidad Nacional de La Plata.
    3. Onil Banerjee & Martin Cicowiez & Adela Moreda, 2017. "Reconciliation Once and for All: Economic Impact Evaluation and Social Cost Benefit Analysis," IDB Publications (Working Papers) 8531, Inter-American Development Bank.
    4. repec:eee:regeco:v:67:y:2017:i:c:p:25-41 is not listed on IDEAS
    5. Banerjee, Onil & Alavalapati, Janaki R.R. & Lima, Eirivelthon, 2016. "A framework for ex-ante analysis of public investment in forest-based development: An application to the Brazilian Amazon," Forest Policy and Economics, Elsevier, vol. 73(C), pages 204-214.
    6. Banerjee, Onil & Cicowiez, Martin & Cotta, Jamie, 2016. "Economics of tourism investment in data scarce countries," Annals of Tourism Research, Elsevier, vol. 60(C), pages 115-138.

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