Abstract
This paper presents an econometric approach to analysis of the relationship between tourist expenditures and state tax revenues. Following earlier writers, a multiplicative tax production model is employed with number of tourists included as a proxy variable for tourist expenditures. Time-series and cross-section regressions are run for several tourist impacted categories of state tax. Data from Florida are used for the 1960–70 time period.
The results indicate that the model performs well using ordinary least squares. Tourist elasticity estimates generated are used to compute hypothetical tax contributions. These appear to be reasonable, though no definitive statements about direct tax exportation can be made. The contribution of the paper is that it provides a beginning step toward econometric quantification of the tourist impact on state economies.
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The author wishes to thank Jon Silberman, Wayne Talley, and Tony Huggins for their help. Financial assistance was provided by the Old Dominion University Office of Research.
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Durden, G.C. Toward a method of determining the impact of tourist expenditures on state tax revenues. Ann Reg Sci 12, 72–82 (1978). https://doi.org/10.1007/BF01286112
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DOI: https://doi.org/10.1007/BF01286112