Capital in a Tourism Satellite Account

Abstract

On the basis that it is important for any measurement programme associated with the economics of tourism to contain a capital formation component, this paper presents a conceptual framework for developing comprehensive measures of Tourism Capital Formation as part of a Tourism Satellite Account (TSA). The paper suggests a method for determining the degree to which the accumulated stock of capital in an economy (or the corresponding flow of new capital expenditures) is, in the words of Tourism Satellite Accounts: A Methodological Framework, ‘driven by the needs of visitors’. In doing this, it examines the issues involved in extending the use of conventional measures of aggregate, industry-specific capital accumulation to provide comprehensive measures of capital usage as part of a TSA. The argument is developed as follows. After an overview of concepts and issues associated with capital measurement, the basic framework is adapted to the specific task of allocating capital assets to the generation of tourism goods and services. Then, answers are offered to a set of detailed questions concerning the linkages of the proposed techniques to previous work on TSAs. In its penultimate section, the paper presents a discussion of specific measurement questions and research requirements. The final section is a summary of conclusions.