Why are direct sales less than total spending?
Not all visitor spending is captured as direct sales. The difference is due to the handling of retail purchases in regional economic models. Retail purchases are broken up into a retail margin, wholesale margin, transportation margin and the cost of the item at the factory. Retail margins are put in the retail trade sector and accrue to the local economy. If the good is not made locally, the producer portion of the price is not captured. The wholesaler and shipper may also be located outside the local area. Gasoline, groceries, clothing, souvenirs, and all other goods bought by visitors are handled this way. For example, if a visitor buys a $100 camera in the local area and retail margin is 40%, then $40 accrues to the retailer. If the camera is made elsewhere, the other $60 is not captured by the local economy. The direct sales impact is $40, not $100 and if the sales multiplier for retail trade is 1.5, the total impact is $60. It is clearly incorrect to multiply 1.5 times $100 and es
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