The Impact of Inbound Tourism on Singapore's Economy: A CGE Modelling Approach

Abstract

Accompanied by the economic and technological development of modern times, world tourism has expanded substantially in the recent half-century, making tourism one of the most important global industries. Singapore is a good example. In 2007, the Singapore tourism sector set a new record of 10.3 million visitor arrivals and generated US$9.4 billion in tourism receipts, accounting for 3% of Singapore's GDP. In the same year, Singapore was ranked the world's fourth most visited city and the third foremost world conference city by Euromonitor. In spite of the development of the tourism industry and its significant effect on the Singapore economy, research undertaken on the economic impact of tourism in Singapore is relatively limited. Existing studies are dated 20 or 30 years ago, so they cannot uncover the role of Singapore tourism today. More importantly, the methodology they used - the input-output modelling - is problematic. Recent studies unanimously agree that input-output modelling has serious limitations. This study will employ a more refined methodology - Computable General Equilibrium (CGE) modelling to gauge the economic effect of Singapore tourism. Through the studying of the Singapore economy and tourism, this study has built a static single-country CGE model for Singapore - SINGATOUR.