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Many argue that tourism development is beneficial for local economies, partly because of spillover effects. Others hold that tourism jobs are lower paying, often seasonal, and can generate a host of social ills with earned income concentrated in low-income households. A Social Accounting Matrix (SAM) of a Pennsylvania region is used to test the impacts of tourism businesses supported by the Progress Fund, a regional Community Development Financial Institution, on household income distribution by incorporating secondary and primary employment based income. Analysis indicates that tourism-oriented activity has relatively large contributions to lower and upper as opposed to middle income households. [ABSTRACT FROM AUTHOR]

This paper is concerned primarily with the economic and welfare consequences of federal redistributive grants to regional governments. We use a model that has two regions, each with households, firms, and a regional government as well as a federal government. The households, firms, and regional governments are all optimizers — households maximize utility, firms maximize profits, and we assume that regional governments are empire-builders in that they choose their expenditure and tax levels so as to maximize total expenditure — the size of their empire. Labor is free to move between regions in response to utility differences and does so until such differences have been eliminated. Interregional migration and federal government redistribution are the main sources of interconnectedness between the two regions. The model is linearized in log-differences and simulated using Australian state-level data. We find that the welfare effects of intergovernmental transfers are trivial but that all other variables of interest change substantially — consumption, employment, taxes, wages, output, and government expenditure. The welfare effects of a federal transfer are little influenced by the choice of empire-building rather than beneficent regional governments, but the influence on other variables is substantial. [ABSTRACT FROM AUTHOR]