In the State of Ceará, a program will promote responsible tourism expansion with environmental sustainability in mind. Brazil will host the 2016 Olympics and the 2014 World Cup.

Impact Evaluation Plan for Tourism Development in Ceará - BR-L1204 (In Spanish only)

The National Tourism Development Program for Ceará (PRODETUR-Ceará) is one of a series of tourism projects being supported by the IDB in Brazil as part of an effort to promote tourism development in advance of the nation hosting the 2016 Olympics and the 2014 World Cup.

This program includes investment in expanding the activities available to tourists with the State of Ceará, improving the image of Ceará tourism and the efficiency of commercialization channels of the industry, strengthening the ability of the state and local governments to plan and manage tourism development, key infrastructure to help expand tourism, and management strategies to ensure tourism expansion remains environmentally sustainable.

Through these investments, the program seeks to expand tourism receipts in three main tourist areas in the State of Ceará, including “sun and beach” tourism along the coast, as well as in two mountainous regions in the interior of the state.

While the program seeks to increase tourism receipts, the ultimate objective is to have a positive impact on employment and income generation within the state. Identifying the impact of a state-level tourism program on these indicators is challenging. Impacts are indirect—they result from tourism expenditures multiplied through the economy to generate employment and income—and this complicates tracking them. Furthermore, a reasonable counterfactual for a state-level tourism program—that is, a state lacking such a program—is difficult to construct.

The overall methodological approach to meeting these challenges is to first identify the impact of the program on tourism trends in the state, and then to use a simulation model to identify the impact of these receipts on employment and income. In order to determine the impact of the program on tourism receipts, changes in the tourism trends in the state before and after the program implementation will be compared to overall trends within the country, broader regional trends and global trends. While not perfect, it allows for an assessment of whether changes in tourism over time for the state are due to the program. In evaluation terminology, it is similar to using a double difference approach (difference over time combined with difference between a treatment and comparison region).

Once an estimate of the impact of the project on tourist receipts can be determined, the second step is to assess the effect of these receipts on employment and income generation within the investment regions. Tourist receipts are income that is brought into the local economy from the outside and are therefore considered to have an effect similar to an external cash infusion. Like any external income, they have a multiplicative effect that can be simulated using a computable general equilibrium (CGE) model. A CGE model is a computer model of an economy based on data that comes from a Social Accounting Matrix (SAM).

The SAM includes all the cash flows within an economy including those between industries—referred to as the input-output matrix—as well as between industries, households, government and the rest of the world and within those groupings. A CGE model has been developed for the State of Ceará and will be used as the basis for the simulation. Additional data on households, tourists and local businesses will be collected using tourist, business and household surveys in the target region of the program to help calibrate the CGE model.

The final result of the evaluation will be an estimate not just of the impact of the program on tourism receipts, but how these tourism receipts influence employment and income generation within the State of Ceará.