Local festivals are increasingly being used as instruments for promoting tourism and boosting the regional economy. This is often reflected in the level of public assistance made available to them. However, it is difficult to assess the extent of the contribution of the festival to local economic growth, and most studies do not examine this issue beyond standard multiplier impacts. This study looks at two local festivals that take place annually in northern Israel. On the basis of detailed data on public assistance and visitor expenditure patterns, it goes beyond the basic impact analysis framework. A method is presented that accounts for net local income increase induced by the festival. The results show modest but positive local growth, suggesting some justification for public assistance for local festivals as a tourism strategy. Policy implications related to increasing the volume of visitors and their spending are discussed.

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A spatial vector autoregressive model (SpVAR) is defined as a VAR which includes spatial as well as temporal lags among a vector of stationary state variables. SpVARs may contain disturbances that are spatially as well as temporally correlated. Although the structural parameters are not fully identified in SpVARs, contemporaneous spatial lag coefficients may be identified by weakly exogenous state variables. Dynamic spatial panel data econometrics is used to estimate SpVARs. The incidental parameter problem is handled by bias correction rather than more popular alternatives such as generalised methods of moments (GMM). The interaction between temporal and spatial stationarity is discussed. The impulse responses for SpVARs are derived, which naturally depend upon the temporal and spatial dynamics of the model. We provide an empirical illustration using annual spatial panel data for Israel. The estimated SpVAR is used to calculate impulse responses between variables, over time, and across space. Finally, weakly exogenous instrumental variables are used to identify contemporaneous spatial lag coefficients.Spatial econometrics, spatial autocorrelation, vector autoregressions, spatial panel data, C21, C22, C23, C53,

This paper estimates some of the impacts associated with a metropolitan university. The impact of the university in the metropolitan arena is conceptualised as a series of backward (expenditure) and forward (knowledge-related) linkages. These relationships can be both positive and negative and can operate in both the short and long terms. Their correct identification requires that the counter-factual situation of the area without the university be adequately specified. On the basis of a case study of the impacts associated with Northwestern University on the Chicago metropolitan area, some of these issues are highlighted. The results emphasise the magnitude of the university expenditure links with the metropolitan economy and the importance of scale when comparing these with more localised negative impacts. The paper concludes with some public policy implications relating to the role of the university as a non-profit organisation competing with local businesses and as an export base sector in the metropolitan economy.

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