University of Hawaii at Manoa, 2424 Maile Way, Honolulu, HI 96822. product and the distribution of output among intermediate and final markets. A computable general equilibrium (CGE) model of the Hawaii economy is then developed, with a focus on transportation and visi- tor spending. CGE modeling techniques are well established in the analysis of economic development, international trade, fiscal policy, and environmental policy (3, 4 ). CGE models have much in common with regional economic models such as IMPLAN, REMI, and RIMS II, which have been more widely used in transportation economics (5–7 ). These models have used econometric forecasts of demograph- ics and economic growth to simulate conditions related to conges- tion, accessibility, and industrial location (8, 9). CGE models are not widely commercially available, and they are data- and programming- intensive. However, they offer some opportunities to better simulate the ability of agents (both consumers and producers) to respond opti- mally to changes in economic and policy parameters. By modeling resource scarcity, price responsiveness, complex nonlinear produc- tion and demand functions, and structural transformations, the CGE approach increases the usefulness of I-O data. Traditional multiplier effects (direct, indirect, induced, and dynamic) of partial equilibrium models are simultaneously and jointly determined endogenously in a CGE framework. It is somewhat surprising that the use of CGE mod- els in transportation economics has, to date, been rather rare—see, for example, Munk (10 ). Perhaps that is due to the data-intensive nature of CGE modeling. A number of interesting results are obtained. First, it is clear that the visitor industry is a primary engine of growth in Hawaii’s econ- omy. For example, a 15% increase in visitor expenditures will gener- ate an increase in the gross state product (GSP) of 1.8%, a significant increase in the context of competitive CGE models. Second, trans- portation industries account disproportionately for this economic growth. In the case of a 1.8% tourism-generated increase in GSP, transportation-related output values increase by 6.5%. This tourism- generated growth also increases the value of restaurants and accom- modations by 9.7%, while other nonvisitor services tend to decline in value. Fourth, the growth in the visitor industry compresses certain residential transportation services because of the increases in costs associated with their provision. Evidence of decline is found both in public transit and in the sales of motor vehicles and parts associated with an expanded visitor industry. Finally, numerous ways in which the modeling and analysis could be extended are discussed. OVERALL ROLE OF TRANSPORTATION IN HAWAII’S ECONOMY While the importance of transportation in the regional economy is no doubt understood, putting a dollar value on it is somewhat difficult. Organizing and regrouping data from the state’s I-O table provide a glimpse of the economic magnitude of transportation in Hawaii (2). Using data from the state of Hawaii input–output (I-O) table, the economic impact of the transportation sector in Hawaii was described, modeled, and forecast under a number of alternative scenarios. Transportation is com- pared with the key economic sectors in the state in output, exports, house- hold consumption, visitor spending, number of employees, and compensation of employees. Next, the overall transportation sector was disaggregated into key activities and functions to present a more complete picture of the important role of transportation in Hawaii. A computable general equilibrium (CGE) model of the economy with a special focus on transportation is developed. Because tourism is the state’s leading sector, the effects of both an increase and a decrease in visitor expenditures were modeled. Both measuring the economic importance of transportation in Hawaii and estimating probable consequences of potential economic changes are of interest. The visitor industry dominates Hawaii’s economy, with small increases in visitor expenditures contributing significantly to the gross state product. Transportation industries, along with restaurant and accommodation services, account for a disproportionately large share of this growth. Key residential transportation sectors (transit and motor vehi- cles) contract in response to cost increases generated by a growth in visi- tor demand. The use of the I-O table and CGE modeling provides a useful analytical and planning tool for evaluating economic scenarios within a region such as Hawaii. The increased availability of both data sets and new modeling techniques offers opportunities to planners, engineers, and trans- portation policy makers. By its very nature, the visitor industry relies heavily on transportation. Tourists travel vast distances to reach distinctive locations. Often the vacation is the voyage, with tourists spending heavily on sightseeing tours, rental cars, and other pleasure trips. Hawaii is a state that epit- omizes the close relationship between tourism and the transportation industry. With a resident population of 1.2 million, Hawaii is visited each year by nearly 7 million people. Visitor expenditures accounted for $10 billion in 1997, one-sixth of total expenditures in the state (1). Nearly a quarter of these expenditures is devoted to transportation and transport-related activities. Of long-standing concern to policy mak- ers is the impact that tourism growth might have on the demand for transportation and other infrastructure-intensive services. The purpose here is to examine the relative importance of trans- portation sectors in a tourism-dominated economy under various sce- narios of tourism growth. Hawaii’s economy and the significance of tourism and transportation industries are reviewed using the 1997 input–output (I-O) table for Hawaii (2). Input–output tables store a wealth of information describing the dollar flows of goods and ser- vices produced and consumed by industries within a region as well as the region’s imports and exports. In addition to providing information on aggregate output as well as the output of key economic sectors, the data also can be used to estimate the composition of the gross regional Transportation and Tourism in Hawaii Computable General Equilibrium Model Denise Eby Konan and Karl Kim 142 ■ Transportation Research Record 1839 Paper No. 03- 3987