A study on the benefits and costs of tourism in Malta

Abstract

The dissertation aims to perform a quantitative analysis of the economic benefits and economic costs of the tourism industry in Malta. Using the knowledge obtained from a review of the economic literature (chapter 2) and an analysis on the historical trends of the tourism industry (chapter 3), this study will quantitatively analyse the positive and negative impacts that an increase of 1 million tourists (over the current volumes of inbound tourism) would have on the Maltese economy. The main economic benefits will be calculated through the use of the Symmetrical Input-Output Table (SIOT), and the Leontief demand-driven model in combination with the Tourism satellite accounts while econometric models will be used to measure the economic costs of tourism. The main conclusions of the study suggest that the direct economic benefits of tourism far outweigh the direct economic costs of tourism. However, if indirect costs had to be factored in, the difference between the benefits and costs of the tourism industry in Malta would be closer, particularly as the volumes of inbound tourism increase.