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A Computable General Equilibrium Analysis of Potential Policy Responses to a Negative Tourism Demand Shock in Singapore

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Abstract:

The 2008 global financial crisis had strong negative economic effects, particularly on tourism. Determining appropriate policy responses to mitigate these negative effects is thus important. Accordingly, this study employs recent Singaporean tourism survey data, updated Singaporean input–output tables, and a Computable General Equilibrium (CGE) model to gauge the short-run negative impact of the 2008 global financial crisis on the Singaporean tourist sector and to simulate the effects of selected three policy responses. Our simulation results suggest that the GST deduction policy is more effective than an industrial subsidy policy. However, if the latter is used by government, then a tourism-focused subsidy policy is recommended since it is much more effective than the economy-wide industrial subsidy in terms of both tourism and the aggregate economy.

Keywords: CGE MODELING; FINANCIAL CRISIS; SINGAPORE ECONOMY; TOURISM POLICY

Document Type: Research Article

DOI: https://doi.org/10.3727/108354211X13110944387284

Publication date: 2011-10-01

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  • The aim of Tourism Analysis is to promote a forum for practitioners and academicians in the fields of Leisure, Recreation, Tourism, and Hospitality (LRTH). As a interdisciplinary journal, it is an appropriate outlet for articles, research notes, and computer software packages designed to be of interest, concern, and of applied value to its audience of professionals, scholars, and students of LRTH programs the world over.
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