Account (TSA) tables.<sup>11</sup> These methods can provide reasonably accurate estimates of the contribution of the sector to overall output, incomes, jobs and sales. The drawback of these approaches is their static nature (they take prices as given); and they do not allow substitution between sectors and do not facilitate distributional analysis or prediction of the effects of a change in tourist expenditures. These models do not shed light on the distribution of earnings from tourism development (Zhang and others 2008; Singh and others 2006; De Agostini and others 2005; and Brida and others 2008).

Within a Social Accounting Matrix Model (SAM)—which is another static approach used in modeling tourism sector impacts—apart from the overall economic impact, it is also possible to address distributional effects across different types of households and institutions. The SAM describes the relevant features of socio-economic structure and the relationship between the structure of production and distribution of income and expenditure among households in a particular area. This methodology combines I-O tables with tables on the distribution of payments to factors of production, including labor, in each economic sector. The multipliers, estimated using SAM tables, measure the extent of backward and forward linkages in the tourism sector and distribution of benefits. A regionally disaggregated SAM model enables distributional analysis at the subnational level.

Computable General Equilibrium (CGE) models are the only dynamic approach, which captures inter-sectoral linkages and models prices as endogenous. Traditionally, these models looked at households as a single category and assessed aggregate welfare changes for this group. Recent modeling efforts have combined CGE with SAM tables to obtain disaggregated welfare measures by household group. This type of analysis has been undertaken for several years in Denmark to assess economy-wide and distributional impacts of tourism growth using the Local INterregional Economic Model (LINE) (Zhang and others 2008). However, this method is computationally complex and it is demanding in terms of the data requirements. Many policy questions, especially if the main focus is on short- to medium-term impacts, can also be answered within the context of a SAM model.

This study uses the Social Accounting Matrix (SAM) multiplier model of tourism impacts developed, permitting ex ante assessment of the direction and magnitude of the local economic and poverty impacts of the growth of the tourism sector. This model provides estimates of the disaggregated direct and indirect effects of an increase in tourist expenditures on the local economy and on households with specific income and skill levels. The model translates an increase in tourism expenditures at the aggregate level into regional impacts, using information from surveys of tourist expenditures, consumption, expenditure and employment patters of Panamanian households, and the general structure of the economy.

> 11 I-O tables decompose GDP into a matrix of inputs and outputs. The Tourism Satellite Accounts approach was developed by the World Tourism Organization with a view of implementing a universal measurement methodology for the tourism industry and the tourism sector.

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