tourism development simulation model: the game

TOURISM DEVELOPMENT SIMULATION MODEL: THE GAME Documentation Version 2.1.1

Copyright @ 1989 Timothy J. Tyrrell

Office of Travel, Tourism and Recreation Department of Resource Economics University of Rhode Island Kingston, RI 02881

The Tourism Development Simulation Model is a computer program developed at URI in conjunction with US Department of Agriculture and US Department of Commerce regional projects on the impacts of Tourism Development. The game version (documented in this report) is designed to illustrate the principles of community budgeting and planning in the context of tourism industry development. It has been used as an educational tool for students, educators and community leaders where the complexities of community interactions cannot be presented in a simple manner. The vehicle provided by the game is more readily accepted than traditional academic presentations. The game player assumes the role of a town administrator who must guide development using tourism promotion and three other general categories of expenditures: industrial development programs, social programs, and environmental projects. In order to balance the town's budget the player must adjust tax rates for residential and business property and decide upon daily tourist fees. The player's objective is to achieve a balanced economic, social, and environmental development - each of these three components is measured by an index and their geometric mean is considered a measure of overall societal well-being. At the end of each year of office the player is presented with quantitative and qualitative assessments of his performance, and given the opportunity to change any of the seven fiscal controls. The game ends after 10 years of service or when the player quits or is fired, which ever comes first.

TABLE OF CONTENTS I.

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I.A The Tourism Industry I.B A Community Setting II. THE TOURISM DEVELOPMENT MODEL . . . . . . 2 II.A Industry Behavioral Equations II.B Dynamics II.C Random Events

3

III. COMMUNITY IMPACTS . . . . . . . . . . . . . . . . . . . . . . 4 III.A Population Change III.B Income Generation III.C Town Finances III.D The Quality of Life

5

IV. GAME PLAY AND USE OF CONTROLS . . . . . . . 5 IV.A IV.B IV.C IV.D IV.E

Startup Active Play Use of Controls Player Performance The End of the Game and Restarting

APPENDIX A. APPENDIX B. APPENDIX C. APPENDIX D.

9 11

Computer Requirements and Installation 15 Behavioral Parameters News Headlines Classroom "role playing" application

I.

INTRODUCTION

I.A The Tourism Industry The tourism industry is comprised of businesses of a wide variety of types which impose a wide variety of impacts on their host community. Tourists and residents who receive impacts are also of many types. In researching the industry it is important to identify and measure impact generators and recipients by their types so that policy measures can address specific problems and needs. In this game, all tourist-related businesses are represented by an industry average, all non-tourist-related businesses are represented by another average, residents are grouped, and tourists are grouped. The emphasis here is on the dynamics of the industry in a typical community setting. Changes in behavior of businesses, residents and tourists are determined by equations relating causal factors to specific actions. The "game" vehicle permits the model to go beyond equations that can actually be estimated in typical research projects and allows speculation about a very complex set of interactions between sectors. Of particular interest are the social and environmental impacts which change the "quality of life" of residents, the "bottom line" of businesses and the "quality of the vacation" of tourists. In addition, the political nature of the decisisons which are made in the communities interest must be reflected in terms of economic climate and the budget balancing abialities of the decision makers.

I.B A Community Setting In order to simulate tourism development in the most realistic way possible, the focus of the game is on the decisions made on behalf of the community by the administrative offices of a hypothetically incorporated small town. There are currently 20,000 residents in town in 10,000 households and the population is growing at 1% per year. Half the population is considered to be in the labor force. 7500 of these are employed by the tourism industry and 2250 are employed elsewhere in the local economy producing an unemployment rate of 2.5% Wage rates in the tourism industry are $10,000 per year and in other industry are $20,000 per year. Although firms in both industries just broke even in the present year, profits earned in the future will be distributed to the residents of the community. Consequently disposable household income averages $11,255 per year. The natural resource base of the community is the draw for tourists and a major factor in the quality of life in the community. 200,000 tourists visited the community this past year, staying an average of 7 days each and visiting the natural resource recreation site on every day of their stay. Residents each made 10 visits per year to the recreation site. Residents and tourist pay the same price per visit to the site managed by the industry. The average seasonal temperature in the community is 75 degrees F, ranging

from 70 to 80 degrees. When temperatures drop below 75 degrees, visits by residents and tourists to the site decrease, when temperatures exceed 75, visits increase. As residential and tourist populations increase there are impacts on the social and environmental characteristics of the community which are most clearly manifested in crime/congestion rates and water quality measures. The overall quality of the community for residents and tourists is reflected in four indexes: economic, social, environmental and the geometric mean of the first three. These measures approximate the economist's vision of a social welfare function. II. THE TOURISM DEVELOPMENT MODEL II.A Industry Behavior Equations There are 19 tourism and "other" industry behavioral equations used to represent the market relationships in the model. Most equations are double-logarithmic and relate certain causal factors to measured behavior via a set of coefficients determined in advance. Because of the functional form used the coefficients can be interpreted as "elasticities" in the economic sense. The set of "explanatory" and "explained" variables in the tourism and "other" industry equations of the model are given in Appendix B. The constants in the equations (CONST) are set to bring the models into equilibrium at the initial settings of the controls and parameters. II.B Dynamics The equations used in the model frequently include the value of the dependent variable lagged one period. This characterizes partial adjustment of behavior toward some distant optimum. The geometric lag implies current year adjustment of the amount indicated by the coefficient on a "explanatory" variable and a decaying adjustment in the amount of the lag coefficient times the previous period's adjustment. Control variables as well as evolutionary factors and random events influence the future values of the dependent variables in the system. The dynamics of the model are caused both by current influence on these variables as well as by accumulated lagged influences. II.C Random Events Weather is an important cause of visits to the recreation site and is measured as temperature in degrees Farenheight. This temperature is generated randomly in the interval between 70 and 80 degrees. The change in export sales by the "other" industry in the community is also generated in part as a random percent deviation from the previous year's export sales in the range from -5% to +5%.

Early in the "player's" administration of the town it is unlikely that any unforeseen event will alter the outcome of control decisions. By the 5th year of the administration, however, there is a 60% probability that some such unforseen event has occurred. These events are annouced as "Important News Flash"'s. Five types of events are built into the model: F: FIRE DESTROYS __% OF THE INDUSTRIAL DISTRICT,

G: GAS SHORTAGE THREATENS TO REDUCE TOURIST VISITS BY __%, O: OIL TANKER SPILLS - REDUCES WATER QULAITY INDEX BY __%, U: UNEXPECTED MEDIA ATTENTION PROMISES TO INCREASE TOURIST VISITS BY __% and B: BAD DEBTS LEFT BY PREVIOUS PLANNER UNCOVERED AMOUNTING TO $_______. The percentages and the dollar amount indicated by the News Flashes are also determined randomly. The percentages can range from 0 to 100% and the dollar amount of the deficit can range from 0 to $250,000. (All random distributions are assumed uniform). The player is given the opportunity to respond to these events before the impact is levied on the social, environmental and economic indexes. The successful planner will take corrective actions given this opportunity. The probability of a subsequent event is low for the immediate future, but increase as before as the years pass. The events may be repeated or not and the severity of the events as measured by the % or dollar amount will vary from occurrence to occurrence and game to game. No two games will be identical. III. COMMUNITY IMPACTS III.A Population Change The 20,000 or so residents of the community work either in the tourism industry or the "other" industry. There is a natural growth in the population of 1% per year as well as migration into and out of the community depending on the difference between the percentage of unemployed workers and 3%. If the unemployment rate is above 3% there

will be some out-migration; if the unemployment rate is less than 3% there will be some in-migration. III.B Income Generation Residential income is the sum of wages and profits paid to workers and owners in the tourism and "other" industries. Residential property values are influenced by the number of residents: with more residents, demand for property rises and property values increase. Property taxes are the only taxes paid by residents and they are controlled by the rate set by the game player. III.C Town Finances The town derives revenues from five sources: daily tourist fees, residential property taxes, tourism industry property taxes, "other" industry property taxes, and interest income on any accumulated budget surplus from previous years (10% annual rate). The town allocates its budget on five categories of expenditures: tourism promotion, "other" economic programs, social programs, environmental programs and interest expense on any accumulated deficit from previous years (10% annual rate). III.D The Quality of Life: Economic, Social and Environmental Impacts In addition to the income generated for residents by the tourism and "other" industries in the communities, there are a host of potential social and environmental benefits and costs which effect the natural resource base. To characterize these developmental impacts and to formulate the objective function for the game "player", a set of four indexes has been developed. The economic index rises with the average wage rate and falls with unemployment. The social and environmental indexes rise with expenditures on social and environmental programs and fall with increases in the numbers of tourist days and residential recreational visits. A social-environmental index, which might be considered a measure of tourism attractiveness, is provided by the geometric mean of the social and environmental indexes. An overall index of the quality of life in the community is provided by the geometric mean of the social environmental index and the economic index. IV. GAME PLAY AND USE OF CONTROLS IV.A Startup The user should startup the IBM PC or compatible with the resident operating system, insert the GAME diskette in drive A and type "A:" and then "GAME". (See Appendix A.) Introductory screens will explain the game briefly, requesting the "player" to "Strike a key when ready . . .". (An example game begins in Figure 1. The player answered the first two questions by carriage returns.)

IV.B Active Play The first active screen of the game requests that the "player" identifies him/herself with 3 initials. These are typed in followed by a carriage return. The "player" is then aked whether the seven economic controls should remain unchanged. At the bottom of Figure 1 the example player (TJT) answers the question "Y" - choosing to leave controls unchanged. Thus, the game asks "ARE YOU READY FOR THE NEXT YEAR TO BEGIN (Y OR N)?". TJT again answers "Y" to continue the game. The community overview screen shown at the top of Figure 2 is then displayed. This screen provides some economic data, up to five news headlines as determined by the indexes described in the preceding text and the player's score. TJT scored 102 in the first year and, judging by the headlines is doing well. Next the player is asked whether he/she would like to see "LOCAL GOVERNMENT FINANCIAL STATEMENTS". TJT responds "Y" and the screen shown at the bottom of Figure 2 is displayed. The reader will notice that the surplus for the year of $39,089 was caused by an increase in tourist fee collections of 2.7%. The social/environmental screen will indicate the cause. TJT chooses to examine "SOCIAL/ENVIRONMENTAL STATISTICS" by responding "Y" to the question shown at the bottom of Figure 2. The screen is shown at the top of Figure 3. Here the reader will see that the average seasonal temperature was 79 degrees, four degrees warmer than the average for the community of 75. It is also indicated that the resident population grew by almost two percent and that the unemployment rate rose from 2.5% to 3.3%. The "TOURISM BUSINESS STATISTICS" requested by TJT shows that while the tourist population remained steady, the recreation-days of both residents and tourists rose due to the warmer weather. This increase lead also to an increase in revenues received by the industry, average profits of $3,014 per firm and the startup of three new firms in by this sector. FIGURE 1. INTRODUCTORY SCREENS FIGURE 2. COMMUNITY OVERVIEW 1 & GOVERNMENT FINANCES FIGURE 3. SOCIAL STATISTICS AND TOURISM INDUSTRY STATS The final informational screen available for the year is for "OTHER INDUSTRY STATISTICS" and is illustrated for the example game in Figure 4. There was a 2.1% decline in export sales which has lead to losses to firms averaging $4,584 and a slight reduction in employment and average wages. At the bottom of this screen the player is asked whether the controls are are still satisfactory. TJT again responds "Y" to :"DO YOU WANT TO LEAVE CONTROLS UNCHANGED" and "Y" to the next question: "ARE YOU READY FOR THE NEXT YEAR TO BEGIN". The community overview

screen for the second year of office is then presented as in the example game at the bottom of Figure 4. If the "player" decides he/she is "NOT READY FOR THE NEXT YEAR TO BEGIN" game game asks "DO YOU WISH TO RESIGN ?". If the response is "N", he/she is again given an opportunity to view each of the informational sreens for the year past. When the player is finally satisfied that he/she has seen enough information and made the appropriate adjustments to the seven controls, he/she requests that the next year begins and the model calculates changes to the community and its industries and overview results for the next year are presented as in the example. IV.C Use of Controls When a player chooses to change one or more of the economic controls, he/she is presented with a screen which indicates the current level of each of the controls and asked to move the cursor to the control to be changed. Once the control to be changed is identified, the player presses the F1 key and types the new value of the control. When done a carriage return permits the player to change another control. When all controls have been changed to the values the player desires, the F2 returns the player to the question about whether he/she is ready to continue with the next year of the administration. As before a "Y" response instructs the game to calculate the next year's events and present the summary screen. A "N" response permits a reexamination of the current year's informational screens. After an uneventful third year in office (the only problems being a surplus of $209,821, a minor decline in household income and slight rise in unemployment) TJT again chooses the "no change" route to the fourth year of his administration. Before the overview screen appears, however, an "IMPORTANT NEWS FLASH" appears on the screen telling of a oil tanker spill which has contaminated part of the community's water supply. TJT is given the opportunity to change a control (possibly the environmental programs budget) but due to the fact that the water quality index is only expected to drop by 3% he chooses to do nothing. His strategy seems to pay off since no news headlines in the following year indicates a water quality problem. FIGURE 4. OTHER INDUSTRY STATS AND OVERVIEW YEAR 2 After another 5 uneventful years of the TJT do-nothing administration, the town is facing a deficit of $347,967 and has hired a consultant to study TJT's performance as a planner. In response to this TJT chooses to increase town revenues by raising the $1 tourist fee to $1.50 per day (See Figure 5). The overview screen for year 10 shows that he has overshot his revenue target and has created a surplus of $335,702. Unfortunately, surpluses like deficits are also disliked by town fathers who indicate some "RESHUFFLING OF ADMINISTRATIVE STAFF".

IV.D Player Performance The first informational screen of each year gives a general overview of the economic, social and environmental conditions of the community. These conditions are measured by three indexes as previously described, and averaged to determine overall community well-being. This provides the annual score for the player. However, the player (administrator) also must attempt to balance the budget in order to keep his/her job. Thus, the relative size of the town's budget deficit or surplus plus the overall wellbeing index are used to evaluate the player's job performance. If the deficit (or surplus) exceeds more than a few percent of the total budget the planner will defamed in the press. If the deficit (or surplus) is greater than about 10% he will be fired despite the overall well-being of the community. In the example, TJT encountered a deficit that he solved by raising revenues. If the deficit had been allowed to exceed more than about $1 million he would have been fired. Although the example game was relatively uneventful, unemployment, low household income, social and environmental problems may all be encountered during a game. While the do-nothing administration may survive and provide an average 10 year score, a high score will only be attained by the aggressive planner who balances new program expenditures with increased revenues and monitors each of the social, environmental and economic indexes in the context of a balanced budget. FIGURE 5. OVERVIEW 9, CHANGING CONTROLS & OVERVIEW 10 IV.E The End of The Game and Restarting The game ends when the planner quits, is fired, or survives 10 years in office. The score consists of the average of the community well-being index weighted by the change in residential population over the number of years in office normalized so that 100 points per year is a good (but not necessarily maximum possible) score. Average scores will exceed 100 points per year occasionally but will rarely be below 80. After the score is computed it is compared and ranked against the scores of the previous 100 players. In the example game, the game ended after 10 years of administration, the maximum allowed per game. The final score is 877 which ranks fourth among the previous 100 games played. The offer to restart is not conditioned upon score. After the player chooses not to restart, he/she is given the opportunity to view a listing of the ranked scores of the previous 100 game results. These results identify the player, by his/her initials, the score earned, the number of years the office was held and the nature of the "NEWSFLASH" events which occurred while in office. These are indicated by the initial letter of the newsflash (F, G, O, U or B) as in Figure 6. FIGURE 6. END OF GAME AND RANKED SCORES REPORT

APPENDIX A. Computer Requirements and Installation The program was written in BASIC and compiled for the IBM PC with 512K. Color graphics have not been used. The program may be run from the 5 1/2" floppy disk provided by typing "GAME" after the machine has been booted and the disk drive with the game disk has been designated. (For example, type "A:" followed by "GAME"). The program may also be run from a hard disk where the contents of the game disk have been stored. For example, you may wish to create a subdirectory for the game by: C> MKDIR \TDSMGAME C> COPY A:*.* C:\TDSMGAME Then to play the game type: C> CD\TDSM C> GAME

APPENDIX B. Changing Behavioral Parameters Equations of the model underlying the game are given in Tables B1-B6. Most of the equations are double logarithmic. That is, the explained and all explanatory variables have been transformed into logarithmic units. Most equations also contain the lagged explained variable. The coefficients of resulting behavioral equations are short run elasticities and lag-adjustment coefficients. The long-run elasticities are computed as the ratio of the short-run elasticity to (1 - lag coefficient). These coefficients are listed again in Table B7 along with their type and initial values. To change coefficient values type "P" in response to the question: "ARE YOU READY FOR THE NEXT YEAR TO BEGIN (Y OR N)?". The screen shown in Figure B1 will appear. The player indicates the parameter to be changed by giving its code number and its new value in response to two separate questions. The player is offered the opportunity to change as many values as he/she wishes. When all changes are completed he/she will respond "N" to the question: "DO YOU WISH TO CHANGE ANOTHER (Y OR N)?". After changes are completed the program re-calibrates the twelve constants in the system of equation so that the game will begin from a static-stable equilibrium for the community. The new set of parameters may be changed for one game only or saved as the new "initial values". The set of "initial values" provided on the diskette have been found to provide a reasonably realistic characterization of the influences present in tourist communities and the speed of adjustments under typical political systems. FIGURE B1. PARAMETER CHANGE OPTION SCREEN

APPENDIX B. Behavioral Parameters Equations of the model underlying the game are given in Tables B1-B6. Most of the equations are double logarithmic. That is, the explained and all explanatory variables have been transformed into logarithmic units. Most equations also contain the lagged explained variable. The coefficients of resulting behavioral equations are short run elasticities and lag-adjustment coefficients. The long-run elasticities are computed as the ratio of the short-run elasticity to (1 - lag coefficient). These coefficients are listed again in Table B7 along with their type and initial values. TABLE B1. RECREATION AND TOURISM BEHAVIORAL EQUATIONS Number of Tourists Visiting (TOUR): LTOUR = CONST + B(1)LTOUR-1 + B(2)LTEXP-1 + B(3)LC(4) + B(4)LSQEQ-1 Average Length of Visit in Days (DPTOUR): LDPTOUR = CONST + B(5)LDPTOUR-1+B(6)LWEATHER + B(7)LSQEQ-1 Total Number of Tourist-Days (QTOUR): QTOUR = TOUR * DPTOUR Total Number of Visits made to the Recreation Site by Residents per Year (QRES): LQRES = CONST + B(12)LQRES-1 + B(13)LP + B(14)LDDHHDI-1 + B(15)LWEATHER Total Visits to Recreational Site Per Year (Q): Q = QTOUR + QRES Where: L..... = a prefix indicating the logarithmic transformation, -1

= a suffix indicating a one year lag.

B(1), B(2), ... the predetermined coefficients. C(4) = community expenditures on tourism promotion, one of the seven controls described

in the text. TEXP-1 = average expenditures per day by tourists = C(1) + P from the previous year, where C(1) is the daily fee charged tourists. SQEQ-1 = combined social - environmental index. WEATHER = difference in degrees F from 75. P = price per visit to the recreation site. DDHHDI = deflated disposable household income TABLE B2. RECREATION/TOURISM INDUSTRY BEHAVIORAL EQUATIONS Number of Firms in the Tourism Industry (FIRMS): LFIRMS = CONST + B(16)LFIRMS-1 + B(17)LPROFRAT-1 Average Price Charged per Day by Local Tourism Industry (P): LP = CONST + B(8)LP-1 + B(9)LQF-1 Average Wage Rate per Year per Employee of Tourism Industry (W): LW = CONST + B(10)LW-1 + B(11)LQF-1 + B(50)LEMPT-1 Number of Tourism Industry Employees per Firm (EMP): LEMP = CONST + B(45)LEMP-1 + B(46)LQF Average Assessed Value of Taxable Property per Firm in the Tourism Industry (PVPFRM): LPVPFRM = CONST + B(18)LPVPFRM-1 + B(19)LPROFRAT Property taxes paid per tourism firm (TAXE): TAXE = C(3) * (PVPFRM/1000)

Where: L..... = a prefix indicating the logarithmic transformation,

-1 = a suffix indicating a one year lag. B(8), B(9), ... the predetermined coefficients. C(3) = industry property tax rate per $1000, one of the seven controls. PROFRAT = The average ratio of Revenues to Operating costs in the Tourism Industry QF = Average visits per tourism firm. EMPT = Ratio of the number of local jobs to the number of persons in the labor force. TABLE B3. "OTHER" INDUSTRY BEHAVIORAL EQUATIONS Number of Units of Product Exported by the "Other" Local Industry (OEXPORT): LOEXPORT = CONST + B(23)LOEXPORT-1(+-5%) + B(22)LC(5) Number of Units of Production Sold Domestically by the "Other" Local Industry (ODOMEST): LODOMEST = CONST + B(23)LODOMEST-1 + B(24)LPOTHER + B(25)LDDIPH Number of Firms in the "Other" Local Industry (OFIRMS): LOFIRMS = CONST + B(28)LOFIRMS-1 + B(29)LOPROFRAT Average Price Charged per Unit of Product by the "Other" Industry (POTHER): LPOTHER =CONST + B(20)LPOTHER-1 + B(21)LQOTHERF Average Wage Rate per Year per Employee of "Other" Industry (WOTHER): LWOTHER = CONST + B(26)LWOTHER-1 + B(27)LQOTHERF + B(50)LEMPT Number of Employees per Firm in the "Other" Industry (OEMP): LOEMP = CONST + B(47)LOEMP-1 + B(48)LQOTHERF

Average Assessed Value of Taxable Property per Firm in the "Other" Industry: LOPVPFRM = CONST + B(30)LOPVPFRM-1 + B(31)LOPROFRAT Property taxes paid per "Other" firm (OTAXE): OTAXE = C(3) * (OPVPFRM/1000)

TABLE B3. "OTHER" INDUSTRY BEHAVIORAL EQUATIONS (Cont.)

Where: L..... = a prefix indicating the logarithm. -1 = a suffix indicating a one year lag. B(20), B(21), ... the predetermined coefficients. C(3) = industry property tax rate per $1000. C(5) = community expenditures on "other" economic development programs. DDHHDI = deflated disposable income per household OPROFRAT = The ratio of Revenues to Operating costs in the "Other" Industry QOTHERF = Average output per "other" firm. EMPT = Ratio of the number of local jobs to the number of persons in the labor force. TABLE B4. RESIDENTIAL POPULATION AND INCOME EQUATIONS Number of Residents in the Community (RES): RES = RES-1*(1.01) + B(32)(3% - UNEMP) Residential Income (INCOME): INCOME = (WAGE+PPFRM)*FIRMS + (OWAGE+OPPFRM)*OFIRMS

Residential Property Value per resident (PVPRES): LPVPRES = CONST + B(43)LPVPRES-1 + B(44)LRES Property taxes paid per Resident (RTAXE): RTAXE = C(2) * (PVPRES/1000)

Where: L..... = a prefix indicating the logarithmic transformation, -1 = a suffix indicating a one year lag. B(32), ... = the predetermined coefficients. C(2) = residential property tax rate per $1000. UNEMP = the percent of the labor force unemployed PPFRM and OPPFRM = profits per firm in the tourism and "other" industries.

TABLE B5. TOWN BUDGET AND EXPENDITURE EQUATIONS Tourist Fees (FEES): FEES = C(1) QTOUR Residential Property Taxes (RTAXES): RTAXES = RTAXE * RESBASE Industrial Property Taxes (TAXES + OTAXES): TAXES + OTAXES = TAXE * FIRMS + OTAXE * OFIRMS Interest Income/Expense (INTINC and INTEXP): INTINC = .10 * ACCSURP-1 if ACCSURP-1 > 0. INTEXP = .10 * ACCSURP-1 if ACCSURP-1 < 0.

Town Budget (BUDGET): BUDGET = FEES + RTAXES + TAXES + OTAXES + INTINC Town Expenditures (EXPS): EXPS = C(4) + C(5) + C(6) + C(7) + INTEXP Town Surplus or Deficit (SURP): SURP = BUDGET - EXPS Accummulated town Surplus or Deficit (ACCSURP): ACCSURP = ACCSURP-1 + SURP

Where: -1 = a suffix indicating a one year lag. C(1) = residential property tax rate per $1000. C(4) = tourism promotion expenditures C(5) = "other" economic development expenditures C(6) = social program expenditures C(7) = environmental program expenditures TABLE B6. ECONOMIC, SOCIAL AND ENVIRONMENTAL QUALITY INDEXES Econonomic Quality Index (YQ): LYQX = CONST + B(49)LSW-1 + B(41)L(RPCI/AVGPCI) + B(42)LEMPT YQ = YQ-1 + YQX Social Quality Index (SQ): LSQX = CONST + B(33)LSW-1 + B(34)LSQEX + B(35)LQRESMA + B(36)LQTOURMA SQ = SQ-1 + SQX Environmental Quality Index (EQ):

LEQX = CONST + B(37)LSW-1 + B(38)LEQEX + B(39)LQRESMA + B(40)LQTOURMA EQ = EQ-1 + EQX Combined Social - Environmental Index (SQEQ): LSQEQ = (LSQ + LEQ)/ 2 Overall Community Quality (Social Welfare) Index (SW): LSW= (LYQ + SQEQ)/ 2

Where: L..... = a prefix indicating the logarithm. -1 = a suffix indicating a one year lag. B(33), B(34), ... = predetermined coefficients. RPCI/AVGPCI = the ratio of current real per capita income to its initial value. EMPT = Ratio of the number of local jobs to the number of persons in the labor force. QRESMA and QTOURMA = two-year moving averages of the number of resident recreation visits and tourist days, respectively. TABLE B7. COEFFICIENT DEFINITIONS AND INITIAL VALUES Explained Coef Coef Explanatory Initial Variable Code Type1 Variable Value # OF TOURISTS 1 LAG # OF TOURISTS-1 .80 " 2 SRE EXPEND. PER DAY -.30 " 3 SRE PROMOTIONAL $ .30 " 4 SRE QUALITY INDEX .20 DAYS /TOURIST 5 LAG DAYS / TOURIST-1 .95 " 6 SRE TEMPERATURE .05 " 7 SRE QUALITY INDEX .05

TOUR.IND.$/DAY 8 LAG TOUR.IND. $/DAY .80 " 9 SRE TOUR.DAYS /FIRM .50 TOUR.IND.WAGES10 LAG T.I.WAGES/EMP. .80 (PER EMPLOYEE)11 SRE TOUR.DAYS /FIRM .20 " 50 SRE EMPLOYMENT RATIO .20 RESIDENT-DAYS 12 LAG RESIDENT-DAYS-1 .60 " 13 SRE TOUR.IND.$/DAY -.80 " 14 SRE HOUSEHOLD INCOME .40 " 15 SRE TEMPERATURE .05 TOUR.IND.FIRMS16 LAG TOUR.IND.FIRMS-1 .60 " 17 SRE PROFIT RATIO 1.00 TOUR.IND.PROP.18 LAG T.I.PROP.V/FRM-1 .90 VALUE/FIRM 19 SRE PROFIT RATIO .10 OTHR.IND.$/UNT20 LAG O.I.$/UNIT-1 " 21 SRE UNITS/FIRM .20

.80

O.I.EXPORT UNT22 SRE O.ECON.DEV.$ .05 O.I.EXPORT UNT23 LAG O.I.EXPORT UNT-1 .90 O.I.DOMEST UNT23 LAG O.I.DOMEST UNT-1 .90 " 24 SRE O.I.$/UNIT -.15 " 25 SRE HOUSEHOLD INCOME .10 TABLE B7. COEFFICIENT DEFINITIONS AND INITIAL VALUES (Continued) Explained Coef Coef Explanatory Initial Variable Code Type1 Variable Value O.I.WAGES/EMP 26 LAG O.I.WAGES/EMP-1 .80 " 27 SRE O.I.UNITS/FIRM .20 O.I.FIRMS " 29

28 LAG O.I.FIRMS-1 .60 SRE PROFIT RATIO 1.00

O.I.PROP.VAL. 30 LAG O.I.PROP.V/FRM-1 .95 /FIRM 31 SRE PROFIT RATIO .05 POP.MIGRATION 32

_

JOBS UNFILLED

.60

SOCIAL QUALITY33 LAG SOC.QUAL.INDEX-1 .40 (INDEX) 34 SRE SOC.PROG.EXPEND. .70 " 35 SREMA RESIDENT-DAYS -.40 " 36 SREMA TOURIST-DAYS -.20 ENVIRONMENTAL 37 LAG ENV.QUAL.INDEX-1 .50 QUALITY INDEX 38 SRE ENV.PROG.EXPEND. .60 " 39 SREMA RESIDENT-DAYS -.20 " 40 SREMA TOURIST-DAYS -.40 ECONOMIC INDEX41 SRE DEFL.HHD.INC.INDX .60 " 42 SRE EMPLOYMENT RATIO .60 " 49 LAG COMM.QUAL.INDEX-1 .30 RES.PROP.VAL. 43 LAG RES.PROP.V/HHD-1 .80 (PER HHD) 44 SRE RES.POPULATION .44 T.I.EMP./FIRM 45 " 46 SRE

LAG T.I.EMP./FIRM-1 .70 TOUR-DAYS/FIRM .40

O.I.EMP./FIRM 47 " 48 SRE

LAG O.I.EMP./FIRM-1 .80 UNITS/FIRM .20

LAG: Lag coefficient, usually one year on explained variable. SRE: Short-run elasticity,due to nature of double log model. SREMA: Short-run elasticity on 2-period moving average of explanatory variable. APPENDIX C. Changing News Headlines Fifty news headlines are contained in the game. Ten each for items of interest about the "TOWN BUDGET", "BUSINESS", "SOCIETY", "ENVIRONMENT" and "PLANNER NEWS". The initial headlines are shown in Figue C1. Each set runs from a worst case to a best case with a "NO NEWS" case in the middle. The headlines are printed on the screen as each of the relevant indexes move above or below their initial values at 1.0. The player may change any of the headlines by typing "B" in response to the question: "ARE YOU READY FOR THE NEXT YEAR TO BEGIN (Y OR N)?". The player is immediately asked to "INPUT K" in order to identify the headline to be changed. A carriage return or "0" answer will list all the headlines in strorage for review. A number from 1 to 50 will prompt printing of the current headline and a request for a

replacement 50-character message. When all headlines have been changed the player responds "N" to the question: "DO YOU WISH TO INPUT ANOTHER MESSAGE (Y OR N)?". headlines remain effective until changed again.

APPENDIX C. News Headlines Fifty news headlines are contained in the game. Ten each for items of interest about the "TOWN BUDGET", "BUSINESS", "SOCIETY", "ENVIRONMENT" and "PLANNER NEWS". The initial headlines are shown in Figue C1. Each set runs from a worst case to a best case with a "NO NEWS" case in the middle. The headlines are printed on the screen as each of the relevant indexes move above or below their initial values at 1.0.

FIGURE C1. NEWS HEADLINE CHANGE OPTION SCREEN APPENDIX D. Classroom "role playing" application The game has been successfully used in classroom situations to simulate town politics and decision-making. In this application each member of the class is assigned a role and a role card which indicates his/her attitude about development issues. At the beginning of each new year individuals meet in groups to develop policy and strategies for dealing with other groups. As the year (round) progresses groups interact. At the end of the year the mayor and the rest of the administration is advised by various public and private groups about actions to be taken on behalf of the community. These actions are input as changes to the seven controls on the local economy and the TDSMGAME provides a report of the influence of the changes and news on any special occurences. One set of groups that has proved successful in this application consists of three major groups with several subgroups: GROUP

Subgroups

TOWN ADMINISTRATION Mayor's Office Finance & Budget Planning Office Police Department Water and Sewer Department Economic Development Department

PUBLIC COMMISSIONS AND BOARDS and Conservation Commission Public Welfare Commission Planning Board PRIVATE ASSOCIATIONS AND BOARDS. Chamber of Commerce Tourism Board Labor Union Local Under this framework the subgroups meet and develop strategies to deal with the other subgroups in each Group. Then Groups meet to develop strategies to deal with other Groups. The Private Associations and Boards will focus on convincing both the Town Administration and the Public Commissions and Boards of their needs. The Public Commissions and Boards will attempt to placate the Private Associations and Boards while influencing the Town Administration with their own point of view. The Town Administration will attempt to convince all interested parties that it has its finger on the pulse of the town and has taken account of all concerns in making its community course corrections using the seven controls of the game. Some of the suggested individual roles and role cards are presented in Figure D1. Figure D1. Examples of Roles and Role Cards