Engines of tourism's growth: An examination of efficacy of shift-share regression analysis in South Carolina

This study investigates the efficacy of the shift-share regression analysis in examining the tourism industry's performance in a region. Tourism employment figures in the state of South Carolina are used to model and compute the change of employment in SC using shift-share regression and classical shift-share analysis (SSA). These methods yield significantly different results challenging the reliability of the non-statistical methods used in much of the relevant literature. The results from the shift-share regression analysis illustrate that the contribution of the tourism industry in SC to the tourism industry in the U.S. and to overall U.S. economy has decreased over the years. Contrary to the expectations, SC as tourism dependent State is not specialized in the tourism industry and demonstrate competitive disadvantage. While other industries appear to contribute more to the SC economy than the State's tourism industry, proper development policies and strategies could help capitalize on State's tourism potential.