Economic and Social Impact of Outbreak Corona Virus on Iran's Export of Tourism Industry; Based on Structural Path Analysis Approach

Document Type : Original Article

Authors

1 Associate Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran

2 . Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran.

3 Master Graduated in Economics, Allameh Tabataba’i University, Tehran, Iran.

10.22034/jtd.2023.320314.2537

Abstract

The world statistics indicate that the spread of Corona virus is caused a decrease of 70% in international tourism industry. Therefore, this paper seeks to answer this fundamental question: what is the effect of Corona disease on the sectoral production and institutional income distribution in Iran? To analyze this question, structural path analysis is used. For this purpose the new social accounting matrix (SAM) of 2016 is estimated. The matrix comprises 110 activities and 22 institutions (including income deciles of urban and rural households, companies and government). Then in consonance with the question, the effects of reducing foreign tourism expenditure on the production and income distribution have been worked out. The results show that the decrease in international tourism has led to decrease in total productions, for which the highest decreases belong to the wholesale and retail sectors, transportation, hotel and restaurant, services related to food and beverages and manufacturing of food products with shares of 16.6, 11.6, 10.5, 9.3 and 6.1 percent, respectively. The results of the structural path analysis approach reveal that among the factors of production, mixed income is the most and important path which stands for decrease of income of all institutions due to the reduction of foreign tourism expenditure, both for urban and rural households as well as companies.

Keywords


Akbari Mehrabani, S. (2012). Quantitative Study of Institutional Income Distribution via Social Accounting Matrix of Iran in 2015, Master's Thesis, Faculty of Economics, Allameh Tabataba’i University. [In Persian]
Balaguer, L., & Cantavella-Jorda, M. (2002). Tourism as a Long-run Economic Growth Factor: The Spanish Case. Applied Economics, 34(7), 877-884. https://doi.org/10.1080/00036840110058923
Banoui, A. A., Javadi, K., Mohajeri, P., Jahanfar, N., Khaleghi, P., & Hosseini, S. M. A. (2019). The Economic and Social Importance of the National Pension Fund in the Framework of Social Accounting Matrix. Tehran: Saba Retirement Strategies Institute, Naqd Plan Publications. [In Persian]
Bouarar, A. C., Mouloudj, K., & Mouloudj, S. (2020). The Impact of Coronavirus on Tourism Sector-an Analytical Study. Journal of Economics and Management, 20(1), 323-335. https://mpra.ub.uni-muenchen.de/107784/
Defourny, J., & Thorbecke, E. (1984). Structural Path Analysis and Multiplier Decomposition within a Social Accounting Matrix Framework. The Economic Journal, 94(373), 111-136. https://www.jstor.org/stable/2232220
Farahani, A. (2016). Measuring the Impact of International Tourism on Iranian Economy; The Social Accounting Matrix Approach, Master's Thesis, Faculty of Economic and Social Sciences, Al-Zahra University. [In Persian]
Farzin, M. R., Abbaspour, N., Ashrafi, Y., & Zargham, H. (2018). The Impact of Inbound Tourism Development on the Production and Employment of Economic Sectors: A Structural Path Analysis Approach. Tourism and Development, 8(4), 38-58. [In Persian]
Federation of Indian Chambers of Commerce and Industry (FICCI) (2020). Travel and Tourism: Survive, Revive and Thrive in Times of Covid-19, Grant Thornton India. https://ficci.in/spdocument/23252/Travel-june-FGT-n.pdf
Internatonal Labour Organization (ILO) (2020). Covid-19 and Employment in the Tourism Sector; Impact and Response in Asia and the Pacific. https://www.ilo.org› briefingnote › wcms_742664
Lundberg, D., Moretti, K., & Stavunga. M. (1995). Tourism Economy, Translated by Mohammad Reza Farzin (2013), Business Publishing Company. Research Studies of Chamber of Commerce, Industries, Mines and Agriculture.
Mulder, N. (2020). The Impact of the Covid-19 Pandemic on the Tourism Sector in Latin America and the Caribbean and Options for a Sustainable and Resilient Recovery. Santiago: Economic Commission for Latin America and the Caribbean (ECLAC), United Nations. https://lac.unfpa.org/sites/default/files/pub-pdf/sg_policy_brief_covid_lac.pdf
Nobakht, M. B., & Pirouz, E. (2007). Development of Tourism Industry in Iran, Obstacles and Solutions, Tehran, Islamic Azad University. [In Persian]
Partovi, M. (2007). The Effect of the Performance of the Tourism Sector on Macroeconomic Indicators during the Third Development. Economic Journal, 8(77 and 78), 5-14. [In Persian]
Qaderi, D. (2014). Measuring the Effects of Increasing Foreign Tourism Expenditures on the Production and Distribution of Institutional Income Using the Social Accounting Matrix Approach. Master's Thesis, Faculty of Economics, Allameh Tabataba’i University. [In Persian]
Ramezani, S. (2009). Analysis of the Role of Tourism on the Economy of Isfahan province in 2015, Master's Thesis, Isfahan University. [In Persian]
Ronald-Holst, D.W., & Sancho, F. (1995). Modeling Prices in a SAM Structure, Review of Economics and Statistics, 77(2), 361-373. https://www.jstor.org/stable/2109871
Sabbagh Kermani, M., & Amirian, S. (2000). Investigating the Economic Effects of Tourism on the Islamic Republic of Iran using Input-Output Analysis. Iranian Journal of Trade Studies, 4(16), 57-83. [In Persian]
Sobhanian, S. M. H., Mohajeri, P., Banouei, A. A. & Khaleghi, P. (2022). Investigating the Effect of Covid-19 Outbreak on the Output of Economic Sectors and Income Distribution Through Non-Oil Exports of Industrial Sub-Sectors. Iranian Journal of Trade Studies, 26(102), 1-36. [In Persian]
Taj Ali, M. (2006). Investigating the Economic Effects of Tourism in the Islamic Republic of Iran, Master's Thesis, Al-Zahra University. [In Persian]
Tayibi, S. K., Jabari, A., & Babaki, R. (2007). Investigating the Relationship between Tourism Development and Economic Growth in Iran (1338-1383). Journal of Humanities and Social Sciences (Economics Special), 26, 83-110. [In Persian]
Thorbecke, E. (1998). Social Accounting Matrices and Social Accounting Analysis, in: W. Isard, I. J. Aziz, M. P. Dreman, R. E. Miller, S. Saltzman and E. Thorbecke (eds.) Methods of Interregional and Regional Analysis, Ashgate Publishing Limited, 281-328.
Tyler, W. G. (1981). Growth and Export Expansion in Developing Countries. Journal of Development Economics, 9(1), 121-130. https://doi.org/10.1016/0304-3878(81)90007-9
United Nations Conference on Trade and Development (UNCTAD) (2020). Covid-19 and Tourism: Assessing the Economic