Abstract
This article focuses on an economic assessment of the target obtained in South Africa regarding the Klein Karoo National Arts Festival (KKNK) applying both SAM and CGE models. Since both models have advantages and disadvantages, tourism economists are confronted with the predicament of determining which model is most suitable for application to any specific event. The findings reveal that when different models are applied to the same dataset from an event, the reported economic impact results differ significantly. Results indicate that considerations such as the data collection or compilation, expected output, research objectives and costs involved will determine the choice of a specific modelling framework. Data from a visitor survey conducted at the KKNK during 2010 were used in the analyses. This finding serves as a warning to assessors that economic impact results can be misleading and, therefore, the application thereof should be handled with the utmost care as the results can readily be misinterpreted by stakeholders.
Highlights
In recent years, serious criticisms have been raised against the integrity of analyses conducted and the outcomes of economic impact studies. Crompton (1999) states bluntly that the integrity of many economic impact assessment studies is questionable
The impact scenario chosen for this study is the impact of expenditures by visitors to the KKNK in Oudtshoorn in 2010 on the Western Cape economy
This application presents as near as possible a valid comparison of the two models (i.e. Social Accounting Matrix (SAM) and Computable General Equilibrium (CGE)), since visitor expenditures can be classified as final demand in both models
Summary
Serious criticisms have been raised against the integrity of analyses conducted and the outcomes of economic impact studies. Crompton (1999) states bluntly that the integrity of many economic impact assessment studies is questionable. A number of researchers and consultants have succumbed to the temptation to adopt inappropriate procedures and assumptions in order to generate high economic impact results (Saayman & Rossouw, 2008) This is done with the intention of portraying the event more favourably in the mind of taxpayers, elected officials and politicians to sustain or even increase the resources that were allocated. Crompton is of the opinion that several underlying assumptions were made during the survey that had a substantial impact on the results Whether these errors were made due to a genuine lack of understanding of the principles and procedures of an economic impact analysis, or were committed deliberately in order to generate a better picture, is somewhat immaterial. This article will investigate the application of two of the aforementioned models (CGE and SAM) to determine the economic impact of the Klein Karoo National Arts Festival (hereafter referred to as KKNK)
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