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Ocean & Coastal Management 145 (2017) 52e61

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Ocean & Coastal Management


journal homepage: www.elsevier.com/locate/ocecoaman

Economic impact of Mississippi and Alabama Gulf Coast tourism on


the regional economy
Zhimei Guo a, *, Derrick Robinson b, Diane Hite c
a
Department of Agricultural Economics and Rural Sociology, 203 Comer Hall, Auburn University, Auburn, AL, 36849-5406, United States
b
Division of Agriculture & Natural Resources, University of California, San Diego, CA, 92123, United States
c
Department of Agricultural Economics and Rural Sociology, 203 Comer Hall, Auburn University, Auburn, AL, United States

a r t i c l e i n f o a b s t r a c t

Article history: The coastal economy is highly sensitive to natural and human disasters and changes in economic con-
Received 13 October 2016 ditions. This study analyzes the local and regional economic impacts of Mississippi and Alabama Gulf
Received in revised form Coast visitor spending in 2013, aiming to provide guidance on future regional planning and management.
17 May 2017
IMPLAN input-output models were constructed which capture the connections among the Gulf Coast
Accepted 19 May 2017
region and the two states' economies. Economic impacts of visitor spending were calculated with the
IMPLAN software. An internet survey of tourists was conducted by Survey Sampling International (SSI) to
a nationally representative population. Overall, 2891 individuals responded, for a response rate of 26.2%.
Keywords:
Economic impact
Based on the survey data, it was estimated that approximately 16.4 million travelers visited Alabama and
Gulf Coast tourism Mississippi Gulf Coast in 2013 and the average per visitor spending was $730.11. In total, visitor spending
IMPLAN yielded $17.6 billion in sales revenue, $9.4 billion in value added, $5.9 billion in labor income, and about
Regional management 200,000 full and part-time jobs in the five coastal counties. Comparatively, the leakage of the visitor
Visitor spending spending out of the regional economy is small. Coastal tourism also contributed to the economy of inland
areas of the two states. But the spillover effect on inland areas and feedback effects on coastal counties
were not large. This analysis examined how tourism industry impacted other working waterfront in-
dustries as well as the rest of the regional economy. Findings help decision makers look beyond the direct
impacts generated by the Gulf Coast tourist spending and contribute to sustainable community planning
and management.
© 2017 Elsevier Ltd. All rights reserved.

1. Introduction exhibited significant growth in the past decades. Although affected


by the 2000 recession, this sector experienced over 200% growth
Tourism has become a popular development strategy in coastal from 1990 to 2004 in both employment and GDP in the Alabama
regions with unique environmental or cultural characteristics. As Gulf Coast (Zhang et al., 2015). After a dramatic decline in 2005 due
previous research indicates, tourism creates new job opportunities to hurricanes, this sector observed constant growth from 2005 to
and increases gross regional products, labor income, and tax rev- 2013. Employment and GDP increased approximately 36.7% and
enues (Deller et al., 2008; Lacher and Oh, 2012). Specifically, 46.8%, respectively (ENOW, 2016, Fig. 1). According to the Alabama
tourism is important for coastal economies. Klein et al. (2004) Tourism Department (2014), the counties of Baldwin and Mobile
found a significant increase in overall domestic travel expendi- attracted over one-third of the total travelers to Alabama in 2013.
tures, specifically concentrated in coastal zones. Tourism in the The tourism and recreation sector also had a general increasing
Mississippi and Alabama Gulf Coast area (GCR) consists of trips for a trend in Mississippi Gulf Coast during the last decade. From 2005 to
broad range of recreational activities from viewing nature to 2013, employment and GDP increased approximately 23.1% and
gambling to accessing coastal beachfronts. GCR tourism has 10.6%, respectively, in this sector (ENOW, 2016, Fig. 2). During this
time, the downward trend in GCR employment and GDP percentage
change coincide with the Great Recession, February 2008e2010
(ENOW, 2016, Fig. 3). Looking at the years following the Great
* Corresponding author.
Recession, the tourism and recreation sector shows resiliency and
E-mail addresses: zzg0001@auburn.edu (Z. Guo), dearobinson@ucanr.edu
(D. Robinson), hitedia@auburn.edu (D. Hite). continued growth.

http://dx.doi.org/10.1016/j.ocecoaman.2017.05.006
0964-5691/© 2017 Elsevier Ltd. All rights reserved.
Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61 53

due to hurricanes in 2004 and 2005 (Zhang et al., 2015). The loss in
tourism revenues caused by the Deepwater Horizon oil spill in 2010
was estimated to be $0.3 - $0.8 billion in coastal Alabama.
Other impact studies that examined effects to tourism from
these shocks looked at all coastal areas in all the Gulf Coast states
and found that negative economic impacts persisted for up to three
years (Oxford Economics, 2010). Aldy (2014)'s study associated
direct employment losses in tourism related sectors with declines
in visits. Larkin et al. (2013) discussed indirect effects of oil spills
that damaged the value of intrinsic locational place-brands (i.e.,
reputation) and consequently resulted in regional economic losses.
This negative externality needs to be accounted for when looking at
economic impacts of oil spills and suing for compensations for local
residents. Therefore, a baseline is necessary to understand how
coastal tourism in the GCR impacts the economies of the two states,
and to better estimate GCR place-brand value for the future.
Tourism affects nearly all facets of the Gulf Coast as well as the
Fig. 1. Employment and real GDP changes in the tourism and recreation sector of the
Alabama Gulf Coast (2009 dollars), 2005e2013 (Data source: ENOW, 2016). regional economy. It also has ripple effects across the Gulf Coast
counties and beyond and is one of the most important sources of
regional economic growth (Zhang et al., 2015). This industry,
combined with notable events such as disturbances and threats,
can cause significant socioeconomic structural change across all
sectors of the working waterfront economy. First of all, some
working waterfront industries directly and indirectly supply goods
and services to tourism industries. Second, employees in the
tourism industry and all its supplying industries spending their
income (on housing, utilities, etc.) also affect other working
waterfront industries. In the same way, other working waterfront
industries affect tourism industry and rest of the working water-
front economy. Therefore, the interplay between coastal tourism
and other working waterfront industries is very important for
economic development and to increase community resilience.
Resilience in the GCR is characterized in the area's capacity to
maintain social, economic, physical, human and natural capital
during times of crisis (Mayunga, 2007).
This study analyzes the local and regional economic impacts of
Mississippi and Alabama Gulf Coast visitor spending in 2013, aim-
Fig. 2. Employment and real GDP changes in the tourism and recreation sector of the
Mississippi Gulf Coast (2009 dollars), 2005e2013 (Data source: ENOW, 2016; 2008
ing to provide guidance on future regional planning and policy-
data were not reported due to data confidentiality laws.). making. It is useful for understanding the resiliency of GCR
communities that are heavily dependent on tourism, and the pos-
itive impacts of industry specific development. Following the re-
In addition, labor income and tourism tax revenues also sults, the leakage of the visitor spending out of the regional
increased in Alabama and Mississippi Gulf Coast counties. From economy is discussed. We also compare direct and indirect job
2005 to 2013, labor income grew 71.7% and 47.6% in the tourism and creation in the Gulf Coast and non-coastal areas, as well as the
recreation sector in the coastal counties of Alabama and Mis- economic multipliers with other coastal regions.
sissippi, respectively (ENOW, 2016, Fig. 4). There was a 32% increase
in tourism tax revenues in 2011 compared with the 2005e2009
average in Baldwin and Mobile, AL (SOG, 2014). Mississippi's Gulf
Coast also saw a 5% increase in tourism tax revenues in 2011
compared to the 2007e2009 average (SOG, 2014). 1.1. Study area
Coastal tourism is greatly dependent on working waterfronts,
i.e., the real property (including waterfront lands and infrastructure The GCR, consisting solely of the coastal counties of Alabama
and waterways) that are used for water-dependent commercial (Baldwin & Mobile) & Mississippi (Jackson, Hancock, Harrison), was
activities (Zhang et al., 2015). Water-dependent and water-related used as the study area for this analysis. Fig. 5 provides a
industries are referred to as working waterfront industries in this geographical reference of the GCR. Throughout the five Gulf Coast
paper. Previous working waterfront economic impact studies con- states (including Texas, Louisiana, Mississippi, Alabama, and Flor-
ducted in the GCR focused solely on the welfare of commercial and ida), tourism is estimated to be a $20 billion industry (GMPO, 2010).
recreational fishing sectors (Posadas, 2015; Posadas and Posadas, In Alabama alone, it is valued at over $3.2 billion annually (Alabama
2013; Upton, 2011). While these studies found that the seafood Tourism Department, 2014). Fig. 6 show that GCR tourists' primary
industry took about two years on average to recover to pre-shock reasons for visiting was accessing the beach, retail shopping, eating
condition, additional losses from diminished branding value were seafood, and gambling (MASGC, 2013). Therefore, it is important for
predicted for up to seven years after an event (Sumaila et al., 2012). GCR tourism development to focus on supporting these types of
Likewise, coastal tourism is vulnerable to threats and disturbances tourism resources supplied. Tourism resource supply of the area is
by natural and human disasters. For instance, the Alabama tourism characterized by the availability of activities for visitors at a desti-
and recreation sector declined over 30% in GDP and employment nation, the GCR.
54 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61

Fig. 3. Employment and real GDP percentage changes in the tourism and recreation sector of the GCR (2009 dollars), 2005e2013. (Data source: ENOW, 2016).

non-coastal economy due to Gulf Coast tourism again impact the


Gulf Coast economy. The feedback effects are the difference be-
tween the economic impacts estimated using a single regional
model and a MRIO. When the feedback effects are relatively large,
i.e., the overall percentage difference of impacts estimated using
the two models are large, a single regional model would give
inaccurate results (Hughes and Litz, 1996). We also build a single
regional model and calculate the feedback effects and the overall
percentage difference.
The economic impacts were estimated by applying visitor
spending survey data to constructed models. First, visitor spending
data were categorized and aligned with IMPLAN sectors. Spending
categories which are strongly associated with particular industries
were bridged into industries, e.g., hotels and motels, amusement
parks, and sightseeing transportation. Industry change activities
Fig. 4. Labor income changes in the tourism and recreation sector of the Alabama and
Mississippi Gulf Coast, 2005e2013 (Data source: ENOW, 2016; 2008 data for Mis- were then created and per visitor spending data were entered into
sissippi were not reported due to data confidentiality laws.). IMPLAN as increased industry sales. Other spending categories (e.g.,
retail services) were bridged into commodities. Commodity change
activities were set up and per visitor spending data were entered
2. Methods into IMPLAN as increased commodity sales. Local purchase per-
centage for commodity change activities was set to SAM model
This study uses IMPLAN (Impact analysis for PLANing: IMPLAN value. Since retail sales were in purchaser prices, they were mar-
Group LLC) for the analysis (MIG, 2012), which is a widely used gined in the model when calculating economic impacts.
professional software for economic impact analysis and social ac- Typical indicators used to represent the economic importance of
counting. IMPLAN comprises computational procedures and industries include output or gross revenues, employment (full- and
regional economic databases. These databases document economic part-time jobs), value-added or gross domestic product, and labor
activities at the county level for 440 different industry sectors, as income. These measures were estimated to show the impacts of
well as spending and transfers between households, governments, Gulf Coast tourism on the five coastal counties and the two states.
savings and investments, and commodity trade between regions. The total economic impacts on the local and regional economy are
Based on both county and state level Alabama and Mississippi the sum of direct effects, indirect effects, and induced effects. The
IMPLAN data, input-output models were constructed and industry impacts on other working waterfront industries and the economy
level economic multipliers were calculated with the software. of non-coastal areas only included indirect effects and induced
Version 3 of IMPLAN was used for this study, which uses a doubly effects. Direct impacts are those realized by the expenditures made
constrained gravity model to estimate trade flows among regions directly to the tourism industry, while indirect impacts are those
(Lindall et al., 2005). Thus it allows multiregional input-output that impact supplying industries to tourism, and induced impacts
(MRIO) analysis capturing the connections among the Gulf Coast are those that arise from the expenditures made by tourism and
region and the rest of the two states' economies. One advantage of supplying industry employees spending their income on goods and
MRIO is to capture feedback effects, i.e., how the changes in the services in the region.
Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61 55

Fig. 5. Map of Gulf Coast Region, by County/State Produced using: ESRI, ArcGIS Business Analyst 2014.

Fig. 6. Percentage of GCR tourists reporting listed activity as non-discrete reason for visiting area, listed by frequency of visitation. Frequent Visitor (>two visits), Casual Visitor
(<three visits) (Data source: MASGC, 2013.

2.1. Data collection residents. Overall, 2891 individuals responded, for a response rate
of 26.2% and an average response time of 11 min. According to
An internet survey of tourists was conducted during the sum- Fig. 7(aed), the GCR tourist is generally between the ages of 19e34,
mer of 2013. The purpose of the survey was to understand house- with household incomes between $25,000e100,000.
holds' recreational usage of coastal resources and expenditures In the survey the respondents were also asked about travel
used to visit the GCR. The survey was created and distributed using destination choices, attributes consumed during travel and asso-
Qualtrics survey software (Snow and Mann, 2012). Survey Sampling ciated expenditures, and questions relating to their seafood con-
International (SSI), a third party survey distributor, was used to sumption when visiting the GCR. Number of individuals in a
access a nationally representative population. Directions for the traveling party was also included, as well as days spent at the
survey along with an access link were distributed to SSI panels. The destination (see Table 1).
survey was distributed until the sample population distribution We grouped the survey expenditure data into the following
across demographics matched national population statistics based industry categories: Retail Stores; Scenic and Sightseeing Trans-
on 2010 Decennial Census data. A total of 11,015 people from all 50 portation; Independent Artists, Writers and Performers; Amuse-
states and the District of Columbia were invited to participate, ment Parks, Arcades and Gambling Industries; Other Amusement
including 10,967 who lived outside of the GCR and 48 local and Recreation Industries; Hotels and Motels including Casino
56 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61

Fig. 7. GCR Tourist Survey 2013 Demographics of GCR visitors. (a) GCR Gender; (b) GCR Age; (c) GCR Race; (d) GCR Household Income.

Table 1 Table 2
GCR tourists' average characteristics. The estimated average spending of Alabama and Mississippi Gulf Coast visitors on
each industry category in 2013.
Size of Travel Party (person) 4
Length of Visit (days) 4 Sector Per Visitor
Distance Traveled to GCR (miles) 452 Spending

Amusement parks, arcades, and gambling industries $55.73


Other amusement and recreation industries $56.64
Hotels and motels, including casino hotels $106.52
Hotels; Other Accommodations (includes condos); and Food Ser- Other accommodations $334.81
Food services and drinking places $50.30
vices and Drinking Places. The estimated average per visitor Independent artists, writers, and performers $8.95
spending per trip on each sector is shown in Table 2. Retail Services - Clothing and clothing accessories $101.58
The total number of visitors was estimated using the ratio of the Scenic and sightseeing transportation services and support $15.58
number of non-local visitors to the number of people invited to activities for transportation
Total $730.11
participate the survey times the difference of total U.S. population
and GCR population. Fig. 8 shows the consistency in GCR and
overall U.S. demographics. Among the respondents, 569 visitors
who lived outside of the GCR indicated they had a trip to Alabama 3. Results
and Mississippi Gulf Coast area. This suggested that at least 5.2% of
U.S. residents (569/10,967) visited this region. The difference of 3.1. Economic impacts on Alabama and Mississippi Gulf Coast
total U.S. population and GCR population was 315, 136, 704 in 2013 counties
(USCB, 2016). Multiplying the ratio with the population difference,
it was estimated that approximately 16.4 million travelers visited Portions of the initial expenditures ($0.9 billion) were imme-
Alabama and Mississippi Gulf Coast and the total spending was diately leaked to other regions that supply the Gulf Coast economy
$11.9 billion. Total impacts were then estimated based on the with goods that were not locally produced. Subtracting these ex-
number of visitors and per visitor spending on each industry penditures from the total spending of $11.9 billion, visitor spending
category in 2013. had a final demand for goods and services of $11.0 billion (Only the
Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61 57

retail margins on visitor purchases of goods accrue to the regional Table 4


economy for goods that were not produced regionally). This Economic Impacts of visitor spending ($11.9 billion) relative to the overall Alabama
and Mississippi Gulf Coast economy in 2013.
generated $5.6 billion in value added, $3.7 billion in labor income
(wages and salaries), and 138,299 full and part-time jobs in directly Economic indicator GCR Tourism Tourism Impacts as
impacted industries in the five coastal counties. Economy Impacts Percent of GCR
Economy
Including indirect and induced effects, visitor spending yielded
$17.6 billion in sales revenue, $9.4 billion in value added, $5.9 Value-added impact $40,285.5a $9355.0 23.2%
(Mn$)
billion in labor income, and about 200,000 full and part-time jobs b
Employment impact 371,930 200,097 53.8%
in this region (Table 3). The type SAM (Social Accounting Matrix) (jobs)
multipliers, the ratios of total effects to direct effects, were also a
County level Value-added data is from IMPLAN Group LLC (IMPLAN, 2013).
represented in Table 3. These multipliers indicated the extended b
Employment data from the U.S. Department of Labor, Bureau of Labor
effects associated with the initial spending on goods and services Statistics (BLS, 2013). http://www.bls.gov/cew/apps/data_views/data_views.
produced locally. Different from type I multipliers which only ac- htm#tab¼Tables.
count for direct and indirect impacts, type SAM multipliers also
account for induced impacts based on the spending of labor income
by employees working in tourism and supplying industries. The 41.3% of total full- and part-time jobs generated by tourism, or
output multiplier of 1.60 suggested that an additional $0.60 was 22.2% of all employment in the five coastal counties. Tourism also
generated in the GCR through supporting industries and household generated over 23,000 jobs in food services and drinking places,
spending for every dollar of visitor spending on locally produced about 11.5% of total jobs created by tourism in this region. Full- and
goods and services. The value added multiplier for the region is part-time jobs created in the top ten industries were converted to
1.67, indicating that an additional $0.67 of gross regional product full-time equivalent jobs using IMPLAN FTE conversion ratios,
was indirectly generated for every dollar of value added in the which were calculated based on employee by industry data from
tourism industry. the U.S. Bureau of Economic Analysis (BEA, 2016). In total, tourism
In 2013, tourism contributed about one-fourth of gross regional generated over 140,000 full-time equivalent jobs in the top ten
product to the regional economy (Table 4). In terms of jobs, tourism industries in terms of employment in the five coastal counties
and associated industries can be credited with over fifty percent of (Table 5).
all employment in the GCR. Jobs created in the top ten industries in Table 6 shows how tourism impacted some other working
terms of employment totaled over 161,000 (Table 5), accounting for waterfront industries (including indirect and induced effects).
80.6% of all jobs generated by the tourism industry. Tourism Tourism had greater impacts on two industries: seafood product
encompassed approximately 43.3% of all employment in the preparation and packaging and transport by water. Over $15
regional economy. Over 82,000 jobs were created in the accom- million of seafood product sales can be credited to tourism. In terms
modation industry (e.g., hotel/motel employment), accounting for of value-added, tourism had a higher impact on transport by water
(over $1.5 million) than other working waterfront industries. These

Fig. 8. Comparison of GCR/U.S. demographics for racial/gender self identification; 2013 GCR Tourists Survey.

Table 3
Economic impacts and multipliers of visitor spending ($11.9 billion) on the Alabama and Mississippi Gulf Coast economy (in 2013 dollars).

Direct Effect Indirect Effect Induced Effect Total Effects Type SAM Multiplier

Output (Sales) (Mn$) $10,997.0 $3629.7 $2987.4 $17,614.1 1.60


Value-added (Mn$) $5603.0 $1997.1 $1754.9 $9355.0 1.67
Labor Income (Mn$) $3699.6 $1252.5 $923.1 $5875.1 1.59
Employment (Jobs) 138,299 35,100 26,698 200,097 1.45
58 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61

Table 5 distribution. Other highly impacted industries included telecom-


The top ten industries in terms of jobs created in the five coastal counties in Alabama munications, poultry processing, state and local government elec-
and Mississippi.
tric utilities, and transport by truck. In terms of employment, the
Industry Full- and Part- Full-time tourism sector generated the highest number of jobs in services to
time Jobs Equivalent Jobs buildings and dwellings, warehousing and storage, and food ser-
Non-hotel/motel accommodations 66,651 60,582 vices and drinking places. The top affected industry in Alabama's
Food services and drinking places 23,087 18,085 non-coastal area in terms of output, value added, and labor income
Other amusement and recreation industries 17,675 14,453
was insurance carriers and mining coal. In terms of employment,
Hotels and motels, including casino hotels 16,043 14,583
Retail Stores - Clothing and clothing 12,426 10,655 the tourism indirectly generated the highest number of jobs in
accessories civic, social, professional, and similar organization.
Amusement parks, arcades, and gambling 9115 7453
industries
Services to buildings and dwellings 4929 4487 4. Discussion
Real estate establishments 4707 4297
Employment services 4210 3832
Maintenance and repair construction of 2440 2341 4.1. Leakage
nonresidential structures
Total 161,283 140,768 The loss of visitor expenditures from the local area, called
“leakage” has been discussed in previous tourism research (Loomis
and Walsh, 1997; Hjerpe and Kim, 2007; Achana and O'Leary,
Table 6 2000). In this study, about $0.9 billion of travel expenditures was
Economic impacts of visitor spending ($11.9 billion) on other working waterfront
immediately leaked from the region due to margins of retail goods
industries in the five Alabama and Mississippi Gulf Coast counties (in 2013 dollars).
that were not produced locally. However, compared with the
Output (Sales) Value-added Labor Income Employment average leakage rate of 30e40% of tourist spending suggested by
(thousand $) (thousand $) (thousand $) (Jobs)
Stynes (1997), the capture rate (the percentage that retains locally
Boat building $475 $88 $94 2 and appears as final demand) of the visitor spending in this Gulf
Commercial fishing $652 $260 $122 24 Coast region was high, over 90%. Low capture rate may be caused by
Seafood product $15,272 $1447 $1239 43
Ship building $62 $17 $16 0
the size and location of the study sites. If the study area is small,
Transport by water $3923 $1562 $694 7 more goods and services will need to be produced and imported
from other regions. Hjerpe and Kim (2007) discussed the leakage
caused by that commercial outfitter located outside of study sites
working waterfront industries were not the top industries affected and provided transportation for tourists between the study site and
by tourism and the impacts were minimal compared with the total large urban areas outside. The high capture rate of this study
impacts to the GCR economy. indicated that most of tourists' desirable services and goods were
produced in the GCR, rather than imported from other regions.
Some of the expenditures that leaked to inland Alabama and Mis-
3.2. Economic impacts to inland Alabama and Mississippi sissippi also had economic impacts on the area and spillover effects
to the Gulf Coast. These impacts were not estimated because the
The economic impacts of Gulf Coast visitor spending extends percentage leaking to this area was unavailable. Expenditures
beyond Alabama and Mississippi coastal counties because of the transacted outside of the GCR (e.g., purchase of air ticket and gas-
goods and services supplied from surrounding areas. In 2013, oline) were not included in the estimation of the economic impacts.
coastal tourism generated $447.3 million in sales revenue in inland They were not considered as a leakage in this study because the
areas of the two states. Coastal tourism was also responsible for spending was not directly integrated with the regional economy
$197.5 million in value-added, 2324 full- and part-time jobs, and and the survey did not collect these data. This type of spending had
$105.3 million in labor income in the inland areas (Table 7). economic impacts to the whole U.S. economy but was beyond the
Including the spillover effects on the inland areas of Alabama and scope of this study.
Mississippi, the impacts of visitor spending in Gulf Coast totaled This study used MRIO to examine the spillover effects of Gulf
$18.1 billion in output, $9.6 billion in value-added, $6.0 billion in Coast tourism on the economy of inland areas of the two states. The
labor income, and more than 202,000 jobs. For all the economic MRIO also captured the feedback effects, i.e., how the changes in
measures, the impacts on the GCR local economy accounted for the states' inland economy due to the coastal tourism again impact
over 97.5% of the total impacts to the two states, i.e., the spillover the GCR economy. For example, increased expenditures of Gulf
effects on inland areas of the two states were no more than 2.5%. Coast tourism resources by tourists can lead to increased incomes
Comparatively, tourism had much higher secondary impacts on of employees involved in supplying coastal resources. In turn, these
the economy of Mississippi's inland areas, rather than Alabama's inland employees can also be Gulf Coast tourists. The proportion of
(Table 7). The top affected industry in terms of output, value added, their income spending on coastal tourism can generate spillover
and labor income was electric power generation, transmission, and effects to the GCR economy. These types of expenditures provide

Table 7
Total economic impacts of Gulf Coast tourism on inland areas and the overall economy of the two states (in 2013 dollars).

Coastal Counties Inland Areas Two States Total

AL MS Total % of Coastal

Output (Sales) (Mn$) $17,614.1 $166.1 $281.2 $447.3 2.5% $18,061.4


Value-added (Mn$) $9355.0 $72.3 $125.3 $197.5 2.1% $9552.5
Labor Income (Mn$) $5875.1 $42.9 $62.5 $105.3 1.8% $5980.5
Employment (Jobs) 200,097 881 1443 2324 1.2% 202,421
Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61 59

feedback effects from the inland areas. Comparing the results of and transport by truck, warehousing and storage. Nonetheless, this
MRIO and the single model, the feedback effects were very small. spillover effect was minimal compared with the effect on the
For instance, the output impact estimated using the single model coastal economy. Tourism created 2324 jobs in inland areas, merely
was $17,610 million, only $4 million smaller than the MRIO esti- about 1.2% of those generated in the five coastal counties.
mate. This suggests that the feedback effect was only 0.02% of the
MRIO result. The feedback effects of the other economic measures 4.3. Multipliers
(value-added, income, and employment) were all less than 0.02%.
The relatively small spillover effects on the inland economy (less This study used the IMPLAN software to build input-output
than 2.5% of economic impacts on Gulf Coast) could explain why models and calculate the multipliers. The multipliers indicated
feedback effects were minor. Both the spillover effects and feedback the strength of backward linkages between tourism industry in the
effects indicate that the interdependence of tourism related in- GCR and the rest of regional economy. Social accounts included for
dustries between Gulf Coast and inland areas of the two states was the model construction were industries and households. If more
not large. social accounts were included such as state and local government
education and non-education, induced effects would become larger
4.2. Employment due to the cross-sector interplay as a result of income spending.
Consequently, estimated multipliers and contributions to the
The top jobs created in the five coastal counties were in the regional economy would be greater. Withholding these accounts
accommodation industry followed by food services and drinking limits possible overestimation of multipliers and contribution.
places, similar to other studies (Lacher and Oh, 2012). Tourism Comparing the multipliers of Alabama and Mississippi Gulf
generated the most jobs in the non-hotel/motel accommodations Coast tourism to other coastal tourism impact studies reveals
sector, about three times the number of jobs created in the second comparable multipliers. In general, models constructed for larger
largest sector food services and drinking places. This can be economic zones have higher multipliers because of more industry
explained by tourists' spending pattern during their stay at Ala- transactions and reduced leakage. The Grand Strand study included
bama and Mississippi Gulf Coast. Expenditures on non-hotel/motel two coastal counties in South Carolina (Salvino, 2012). Its multi-
accommodations accounted for about 45.9% of tourists' total pliers are the same (employment multiplier of 1.4) or slightly lower
spending. Including expenditures on hotels and motels, visitors (both output and labor income multipliers of 1.5) than those
spent over 60% on accommodations in the GCR. Jobs created in calculated in this study (1.6). California coastal tourism and recre-
accommodation sector consisted of over 41% of all jobs generated. ation has a slightly higher multiplier of 1.8 for both the value-added
Previous studies argue that tourism generates entry-level or and labor income effects. Its employment multiplier of 1.3 is
low-paying jobs (Goos and Manning, 2003; Lacher and Oh, 2012). In slightly lower than this study (Kildow and Colgan, 2005).
this regard, it is interesting to compare the type of jobs created in Like any other models, the input-output models constructed by
different tourism sectors. The ratio of labor income impact to the IMPLAN software incorporated a few important assumptions
employment impact allows us to compare the jobs created in including constant returns to scale, linear and homogenous pro-
direct-related industries (i.e., industries directly provide goods and duction functions, perfectly elastic factor supplies, and constant
services to visitors) with those in other industries in the regional technology. For example, constant returns to scale means that if
economy. For direct-related industries, the ratio (of direct effect) output of a tourism industry or supplying industry increases by
was $26,750/job, indicating that, on average, the full- and part-time 10%, inputs required will also increase by 10%. These assumptions,
jobs directly created by tourism had an annual wage of $26,750. The to some extent, determined how industries link to one another in a
ratio of indirect effect suggests that jobs created in supplying in- region and the estimation of multipliers. Consequently, they
dustries had an average annual wage of $35,683. The ratio of affected the calculation of indirect and induced effects of the
induced effect suggests that jobs created through spending the coastal tourism on the regional economy. In the case that output of
income earned in direct-related and supplying industries had an a tourism industry increase by 10%, input requirements only in-
average annual wage of $34,575. Jobs indirectly created by tourism crease by 9% due to economies of scale; the spillover effects will be
had a higher wage in the coastal counties. One reason for this may smaller.
be that higher percentage of seasonal and part-time jobs generated
in direct-related industries than in indirectly-related industries. In 5. Conclusion
total, there were 61,798 full- and part-time jobs indirectly created
by supplying industries and spending of income. These jobs Many coastal communities have shifted from traditional mari-
accounted for about 30% of total jobs created in the coastal time industrial operations, such as shipbuilding, to service and
counties, or 16.6% of all employment in this region. Jobs created in tourism oriented economies (Jones and Mangun, 2001). With these
this region had an average lower wage than the annual average economies, local stakeholders should consider environmental and
wages per employee of the five coastal counties ($40,198.44) in cultural characteristics of the area when forming development
2013 (BLS, 2013), which is consistent with previous studies (Goos strategies. The GCR has these characteristics, as well as other types
and Manning, 2003; Lacher and Oh, 2012). of leisure tourism resources, both natural and cultural. Local policy
Comparatively, jobs indirectly created in inland areas of Ala- makers and developers need to find effective strategies towards
bama and Mississippi had a much higher average annual wage of sustainable management GCR's coastal tourism and recreational
$45,310. It was higher than the annual average wages per employee resources.
of the inland areas of the two states ($40,096.99) in 2013 (BLS, Moreover, the GCR economy is highly sensitive to natural and
2013). This suggests that tourism affects different industries and human disasters and changes in economic conditions. In addition
creates comparatively higher-wage jobs in inland areas. In the GCR, to the impacts of hurricanes, Deepwater Horizon oil spill also
jobs were mainly created in industries such as accommodation, demonstrated how human disasters negatively affect Gulf Coast
food and drinking, amusement and recreation, and retail services. tourism as well as the whole regional economy (Ritchie et al., 2013).
In the inland areas, larger percentage of jobs were generated in Disturbances such as expanding population and subsequent land
electricity, telecommunications, poultry processing, insurance use competition has increased land values and altered land use
carriers, mining coal, state and local government electric utilities, patterns (AWASC, 2011). A confluence of notable events has
60 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61

occurred in the past decade. These threats and disturbances have Parks and Rural Development. Island Press, Washington DC, pp. 67e87.
Alabama Tourism Department, 2014. Sweet Home Alabama e Travel Economic
had the potential to cause significant socioeconomic structural
Impact 2013. Alabama Tourism Department. http://tourism.alabama.gov/conte
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