Acquire the data

Subtask Description:
 Economic and social analysis.

Action points of the implementation:
Set up the social and economic analysis by planning their scope and by acquiring the data for their implementation.

Result : Economic and social dimensions of environmental changes

Area:
Firth of Clyde, Loch Fyne, Scotland

Policy Issue:
Implications of increased leisure and tourist use of the Firth of Clyde

Human Activities:
Tourism, aquaculture, fisheries, maritime transport

General Information:
As the Scottish Government aims to keep pace with global tourism trends and achieve 50% revenue growth, with social, economic and environmental stability, a study was made to examine the potential for future development of the sailing industry in the Firth of Clyde. The study suggested that the Clyde estuary could double its berthing capacity for recreational boating by 2015, but this created several stakeholder concerns relating to the impacts of increased leisure boating on other resource users, particularly mussel aquaculture and navigation, and especially in relation to competition for space and water quality.

Example of Implementation:

Economic component of the model: a tourism example
The action to be valued is the increase in quantity of tourist facilities due to increasing tourism trends. McKensie Wilson (2006), studying the potential for development of the sailing industry in the Clyde, suggested that the whole Clyde estuary could double its berthing capacity for recreational boating by 2015, in response to an increased demand.

The change in number of tourists is planned to be assessed through several scenarios:

Evaluating this range of alternative tourist trends will also help to evaluate the sensitivity of the results.

Mean spending per boat per stay has been estimated to be £250, with an average length of stay of 3 days. These data could easily be refined since precise data on this tourist segment exists for the Clyde Estuary, even if these data need to be rescaled to fit the chosen boundaries of the system. McKensie Wilson (2006) report very precise figures about annual expenditure associated with sailing activity in the Clyde. They also make a distinction, in the spending patterns, between different types of tourists (permanent, seasonal berth holders, visiting boats, etc.). Moreover, the report also focuses on the expenditure inside the Clyde area, which is important to make the assessment of the secondary effects relevant.

The direct effects of the increase in tourism trends are captured by these estimates of visitor spending. They can be completed by current employment estimates in the sector or estimations of income and profits for instance.

In order to get a better estimate of the economic effects of increased recreational boating in the area, i.e. evaluate the secondary effects of sailing expenditure in the Firth, output multipliers are used. The Scottish Executive provides regional Input-Output tables as well as Type I and Type II multipliers even though these data need to be further disaggregated to be suitable for a local analysis, at the Firth of Clyde level.

The McKenzie Wilson (2006) r eport helped identify, in the Scottish multipliers table (in which expenditure is highly disaggregated), four key economic sectors that are mainly impacted by the recreational boating activities (they represent relevant categories of spending). These categories and their multipliers are shown in the table below.

Input-output tables and multipliers for Scotland, Scottish Executive, 2005 (2002 data), available online: http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/Input-Output .

 

Scotland output multiplier (Type II)

Estimate of the Clyde area multiplier (Type II)

Recreational, cultural and sporting activities

1.93

1.7

Tourism (hotels, catering and pubs)

1.49

1.4

Supporting and auxiliary transport activities

1.30

1.2

Retail

1.71

1.5

Average

1.61

1.45

Source: McKenzie Wilson (2006) : Sailing in the Clyde economic impact study, Scottish Enterprise Ayrshire, Glasgow.

The local (at the Clyde Estuary level) output multipliers for these sectors are not available and the actual values will depend on the structure and linkages of businesses and industry within the area. McKenzie Wilson (2006) estimate that the indirect effect in the Clyde area are 75% of the Scottish indirect effect (to our knowledge this figure is not specifically based on a survey, but is mostly a rough estimate) and assume an equal spend across the four categories to calculate the average and get a unique multiplier.

These figures will need to be further disaggregated in order to get sector and average output multipliers corresponding to the Firth of Clyde, which is only a part of the whole Clyde area on which the McKenzie Wilson (2006) report is based. To do this, one could refer to the infrastructure available in the Firth (number of marinas, pontoons, moorings, etc), compare it to the rest of the Estuary and use the information available to scale down the multipliers.

The employment effects and multipliers are also used, rescaled from the Scottish table using the same techniques as for the output multipliers. These should be used and interpreted carefully. Stynes (1997) indeed recommends income or value added as the best measures of economic impact to report. Job impacts might, according to Stynes, be misleading because jobs in the tourism sector are largely part-time and seasonal. Wages and salary rates also vary across industries, which can make the multipliers vary accordingly.

Comments:
This is an example of a plan regarding the economic analysis referring to the policy issue of Firth of Clyde. Although the economic analysis and approach/assessment method used varies regarding the chosen policy issue and the available data, this can provide a guideline to the planning that accompany the analysis and also give ideas about the use of possible data resources.

Contact: Callum Whyte, C.Whyte@napier.ac.uk.

For “Recreational, cultural and sporting activities” this represents 75% of 0.93 (indirect and induced effects) + 1 (direct effect, resulting from the change in final demand, increase in one unit of the output in the local economy): 0.95*0.75 + 1 = 1.7.

Stynes J.D., 1997. “Approaches to Estimating the Economic Impacts of Tourism; Some Examples”, Economic impact approaches.