The economic effects of the tourists in Isfahan province, two regional input-output approach

Extended Abstract
Purpose: Improving economic conditions and the quality of life is part of the goal of achieving economic development. The tourism industry as a dynamic industry with distinct characteristics can share an important part of the countries' economic and production activities.
In this respect, the tourism sector can play an important role as a driving force of economic development. The impact that this industry can have in different stages of economic development depends on the specific characteristics of the country. Given the complexity of tourism consumption, its economic impact is felt widely in other production sectors, contributing in each case to achieving the aims of accelerated development. The tourism industry affects the economic growth of countries in both direct and indirect ways. Tourism can contribute to the goal of the balanced development of different regions in a country because the income from it can lead to economic growth and the balanced development of different regions of a country by creating jobs, boosting economic activities and generating income. Therefore, it is important to identify the economic effects of tourism development in different regions of the country according to the local capacities. With its rich history and ancient civilization, Isfahan has many historical and religious monuments and is considered as one of the centers of tourism in the center of the country. Therefore, considering the potential of Isfahan, the question to rise is ‘how can tourism in this city affect the local economy?’ In this regard, the current research measures the effectiveness of domestic tourism in Isfahan Province on the production of the province and the national economy. To this end, the two-region input-output approach is used.
Methodology: Over the past decades, introducing the concept of regional planning and applications of the input-output model in this context have led researchers and policy-makers to consider regional input-output tables more seriously. Since survey-based methods of providing input-output tables are expensive and time-consuming and regional data are poor in Iran, non-survey based methods, especially location quotient (LQ), are the most common methods for providing regional input-output tables in this country. In recent years, LQ method and its various functions have significantly evolved, and the SFLQ function has been introduced.
Among the methods of spatial contribution, the industrial specific spatial contribution method of Flag SFLQ has been used to extract a provincial input-output table. This can maximize the number of spatial economy factors included in the coefficient of spatial contribution. It can also minimize statistical errors. Furthermore, the two-regional input-output table model has been used to investigate the effect of tourism expenditures on the production in Isfahan Province and the national economy. So, a two-region input-output table, production coefficients and spillover effects have been estimated.
Considering the tourists' investment in the export of Isfahan Province and an increase in the final demand of the province (), the rise of production due to the arrival of domestic tourists in Isfahan Province is estimated with Equation:



 



The production effect of the domestic tourism in the province is evaluated through Equation:



 



The productive spillover effect of the arrival of domestic tourists in Isfahan Province on other national economic sectors is equal to ..
This is how the effectiveness of domestic tourism in Isfahan on the production of the province and the national economy is estimated.
Findings and Discussion: In the current research, the effect of domestic tourists entering Isfahan Province was studied using a two-region input-output table. Therefore, firstly, the table is estimated for Isfahan Province and the other national economies at the level of 20 sectors using the SFLQ method. Then, after calculating the multiplier coefficients of production, the effect of the arrival and expenditure of domestic tourists in Isfahan on the national economy and the economy of the province is examined. Calculation of extra-regional or spillover effects for both regions is also done in this research. The results of the research show that the arrival of domestic tourists in Isfahan Province in 2016 increased the production of this province by 4325 billion Rials. The arrival of domestic tourists in Isfahan not only increased the production of the province but also had an extra-regional impact of 69 billion Rials on production. As a result, the effect of tourists entering in the province at the national level, which is obtained from its total effect on Isfahan and the other national economies, is 4394 billion Rials. In addition, based on the results of the research, "Other Services" and "Transportation" sectors have been most affected by the arrival of domestic tourists. Next to them, the "Food, Beverage and Tobacco Industries" sector is prioritized. These results are not far from expected because the arrival of tourists is mostly under the service sectors including accommodation costs, cultural and sports costs, costs of buying souvenirs, etc., and costs including those related to transportation and food.
Conclusion and Policy Implications: Given the broad role of tourism in economic prosperity, the purpose of the present study is to answer the question ‘What is the impact of incoming tourism in Isfahan Province on the production of that region and other regions?’ To this end, the national input-output table of 2016, published by the Central Bank, was prepared based on the method of generalized SFLQ spatial contribution in twenty sections and for two regions of the province and other national economies. Then, the effectiveness of domestic tourism in Isfahan was examined. The results of the present study show that the entry of tourists into an area, in addition to affecting the production of the region itself, has an external impact on other national economies.
The results of the research also show that the arrival of domestic tourists in Isfahan Province in 2016 increased the production of this province by 4325 billion Rials. In addition, it not only increased the production of Isfahan but also had an extra-regional impact of 69 billion Rials on production.