The impacts of temporary but anticipated tourism spending: An application to the Glasgow 2014 Commonwealth Games

• CGE has advantages for examining temporary and anticipated tourism spending.
• Examine impact of non-Scottish tourists spending at Glasgow 2014 Commonwealth Games.
• Economy impact depends on factor supply assumptions and behavioural characteristics.
• Optimal degree of pre-announcement shown for GDP impact of temporary tourism shock.

An extensive literature attempts to identify the economic impact of tourism expenditure. While Input-Output methods have been widely applied these may not always be appropriate for such applications and there is a growing use of more flexible Computable General Equilibrium (CGE) approaches. This paper uses a multi-period Scottish CGE model to estimate the system-wide effects of the temporary tourism expenditure related to the Glasgow 2014 Commonwealth Games. We quantify the sensitivity of our results to model specification, focusing in particular on how investment and consumption decisions are made and shifted over time to accommodate the temporary tourism shock. As part of this analysis we identify the pre-announcement period that optimises the present value of the economic impact. Whilst the empirical results apply to a specific event, our results have implications for similar analyses applied to mega events and other temporary phenomena affecting tourism expenditure, such as terrorism attacks or epidemics.