nep-tur New Economics Papers
on Tourism Economics
Issue of 2010‒11‒06
five papers chosen by
Antonello Scorcu
University of Bologna

  1. A Dynamic Panel Data Analysis of the Immigration and Tourism Nexus By Neelu Seeteram
  2. The efficiency of government promotion of the tourism industry By Hui Shi
  3. The Effectiveness of Tax Incentives in Attracting FDI: Evidence from the Tourism Sector in the Caribbean By S. VAN PARYS; S. JAMES
  4. A Study of Outbound Tourism From Australia By Neelu Seeteram
  5. Which instruments to preserve forest biodiversity? By Elodie Brahic

  1. By: Neelu Seeteram
    Abstract: There is a growing number of studies investigating the tourism migration nexus from a theoretical perspective. The empirical literature on the topic however, lags behind. The aim of this paper is to test for the effect of immigration on tourism and to estimate tourism immigration elasticities. The dynamic panel data cointegration technique is applied to model international arrivals for Australia. The results establish the relationship between immigration and tourism and show that trends in immigration influence arrivals to Australia. The estimated short-run and long-run migration elasticities are 0.028 and 0.09 respectively. These have implications for destination managers who can improve the efficiency of their planning exercises by incorporating additional information on immigration in their policy formulation.
    Keywords: Immigration, Tourism Demand, Dynamic Panel Data Cointegration, Australia.
    Date: 2010–05
  2. By: Hui Shi
    Abstract: As promotion of tourism changes preferences, and hence the utility function, the usual comparative static analysis is not appropriate. A comparison of utility levels with, and without, promotion has to be conducted with the same utility function. The choice of the utility function depends on whether the promotion provides any utilityenhancing information or simply induces consumption switching (from non-tourism goods to tourism goods). With a series of simulations, it is shown that in the case of information enhancement, tax funded promotion of tourism may be efficient. In addition, it may also overcome the inefficiency associated with imperfect competition if the tourism industry produces under a higher degree of increasing returns than the non-tourism industry. If the reverse is true, and in the absence of information enhancement, promotion of tourism will reduce social welfare in accordance to the original preference.
    Keywords: preference, increasing returns, promotion
    JEL: D43 D50 D61 H21
    Date: 2010–05
    Abstract: We investigate to what extend tax incentives have been effective in attracting Foreign Direct Investment in the tourism sector in the Caribbean in the period 1997-2007. More precisely, we test whether the neoclassical investment theory prediction that tax incentives, by lowering the user cost of capital, raise investment, holds in the Eastern Caribbean Currency Union (ECCU). We use differences in difference to assess the impact of an important change in tax incentives for tourism investment in Antigua and Barbuda in 2003. The other ECCU countries serve as excellent control group countries since the small islands share the same currency, coordinate macroeconomic policies to some extent, have similar geographical characteristics, and compete for the same big international tourism corporations. Accounting for other factors driving tourism FDI in this region, we find that tourism investment in Antigua and Barbuda after 2003 increased significantly more than investment in the other six ECCU countries due to the tourism tax incentives reform. This study is one of the first to assess the impact of sector specific tax incentives on investment in developing countries. Moreover, while previous studies relied on cross sectional differences, our differences in difference approach offers a cleaner way to identify the effect of the tax incentives policy.
    JEL: H21 H25 H32 F21
    Date: 2010–09
  4. By: Neelu Seeteram
    Abstract: This paper exploits the dynamic panel data cointegration technique to determine the demand elasticity of short term international departures from Australia with respect to changes in income, real exchange rate, migration and the cost of domestic air travel. The data utilised are from 1991 to 2008 for 47 destinations. The results confirm those of previous studies in showing that income is the single most important determinants of departure from Australia in the short run and in the long run. 61 percent of Australian travellers tend to repeat their visit. Increasing migrations from particular countries has a positive effect on departure to these nations. Real exchange rate is insignificant in explaining departures from Australia. International crisis occurring in year 2002 and 2003 affected departures from Australia in a negative way.
    Keywords: Outbound Tourism, Australia, Dynamic Panel Data, Panel Cointegration, Corrected Least Square Dummy Variable.
    Date: 2010–05
  5. By: Elodie Brahic
    Abstract: In general, neither the social norms nor market dynamics stimulate spontaneously activities and practices conducive to biodiversity. The nature of public good of biodiversity leads to its rapid erosion. Even if it can respond positively to social expectations and improve welfare in the long term2, taking into account biodiversity often leads to changes in the way we produce or how to exercise its property right. The consideration of biodiversity may determine production losses and income decreases.[...]
    Date: 2010–10

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