The economic analysis of crisis events impact on tourism industry in Taiwan

Abstract

There were many crisis events including natural disasters, epidemic disease, international conflicts, and economic downturns around our world over the past ten years. The crisis events have domino effects on the other regional tourism industry and the whole economy which is associated with the possible worldwide recession. This paper employs the input-output model by Leontief (1986) to construct economic effects of the regional crisis events on Taiwan’s tourism industry. This paper takes three examples, such as the 921 earthquake of Taiwan in 1999, the 911 terrorist attacks of the US in 2001, and the outbreak of global SARS in 2003. The empirical results indicate the final demand, output, income and employment effects of the tourism industry suffered the greatest impact from SARS, followed by the 921 earthquake in 1999 and the 911 terrorist attacks in 2001. These changes in industry linkages effects based on the different crisis events exit in this model, for example, the entertainment-culture service industry shows the low linkages effects since the 921 earthquake event. Then, the entertainment-culture service industry tends to be a leader industry which obtains the low sensibility dispersion with high power dispersion followed the 911 and SARS events.