Combining econometric and input-output methods to assess the regional impact of disasters: the case of red tides and tourism in Florida, João-Pedro Ferreira

 

Combining econometric and input-output methods to assess the regional impact of disasters: the case of red tides and tourism in Florida

Thursday, 31 March 2022, 4:30 pm

 

 

“Disaster or hazard events can significantly reduce the attractiveness of a place and reduce tourism demand. The Red Tide event that began in October of 2017 and ended in January of 2019 limited access to marine and coastal recreational activities along the Gulf Coast of Florida and heavily impacted tourism demand for this area. Using microdata on Airbnb properties and water sample records, this work combines econometric methods and multi-regional input-output techniques to estimate the effects of this harmful algal bloom on the peer-to-peer accommodation market. We conclude that for each test detecting a significant concentration of the organism that causes the Red Tide events, the average price and the number of reservation days in Airbnb properties both decline. These declines represented a direct loss of approximately $70 million in the Airbnb market in Florida for 2018. In addition, many other activities are indirectly affected as tourist revenues decline. A multi-regional input-output model for Florida is employed to analyze the interdependencies between the tourism sectors and the broader regional economy. After combining micro- and macro-level modeling, our work concludes that the total economic impacts of the 2018 Red Tide event observed via the Airbnb market correspond to declines of $317 million in sales revenues, $197 in Gross Value Added and nearly 3,000 jobs. Due to interregional spillovers, 81% of the impacts on sales were felt in the Southwest Gulf Area and 19% in the rest of Florida.”

Combining econometric and input-output methods to assess the regional impact of disasters: the case of red tides and tourism in Florida

João-Pedro Ferreira, Food and Resource Economics Department, University of Florida - Professor