The Advanced Econometrics of Tourism Demand

Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA

“…Therefore, the empirical literature considers the income, the exchange rate, and some other indicators as the potential determinants of the international tourism demand. However, the literature review papers analysing the international tourism demand indicate that the income is the major determinant of the international tourism demand, and it is followed by the exchange rate (Agarwal & Yochum, 1999;Dritsakis, 2004;Peng, Song, & Crouch, 2014;Song et al, 2012;Song, Witt, & Li, 2009).…”

Role of tourism price in attracting international tourists: The case of Japanese inbound tourism from South Korea

“…income) variables with sound theoretical basis (Peng et al, 2012). The empirical usefulness of this approach lies in identifying which factors contribute most to tourism demand Song, Witt, and Li, 2009).…”

Varying Elasticities and Forecasting Performance

“…Carruth and Dickerson (2003) also raised the possibility of asymmetric consumer spending behavior, claiming that when aggregate spending is above its long-run equilibrium value, consumers behave differently than when it is below its long-run equilibrium value. Furthermore, applications of the TVP models showed that elasticities are not stable in the estimation periods because of structural changes Song et al, 2009). In most cases, the change in the parameters is captured in the transition equation by a random walk (RW) process.…”

“…In this study, this assumption was modified to allow for the parameters of the tourism demand model to vary across the business cycle depending on the state of the economy. The growth rate model was specified from Song et al (2009); the advantage of using such a growth rate model in tourism demand analysis is that it allows researchers to consider tourism imports in the context of overall economic fluctuations along the business cycle.…”

“…Tourism demand studies generally assume that the effects of income and price on demand for tourism remain stable across the business cycle (Crouch, 1995;Lim, 1997;Li et al, 2005;Song and Li, 2008;Song et al, 2010;Schiff and Becken, 2011). In contrast to these studies, the modified growth rate (MGR) model and the time-varying parameter (TVP) model dilute the assumption of parameter constancy (Harvey, 1990;Song et al 2009;Smeral, 2009Smeral, , 2010Smeral, , 2011Smeral, , 2012. Moreover, applying the recursive ordinary least square (OLS) method shows that the assumption of constant parameters is too restrictive (Song and Witt, 2000).…”