nep-tur New Economics Papers
on Tourism Economics
Issue of 2017‒11‒12
one paper chosen by
Laura Vici
Università di Bologna

  1. Causality in direct air services and tourism demand By Tay-Ryang Koo; Christine Lim; Frédéric Dobruszkes

  1. By: Tay-Ryang Koo; Christine Lim; Frédéric Dobruszkes
    Abstract: Unlike income or relative prices, air transport attributes and tourism demand on a given route can be endogenous. Using instrumental variables, this study attempted to account for the circular causality in estimating the effect of direct air service on tourism demand. Although we found evidence of endogeneity, the nature of the circular causation is context-specific; while direct air service can be regarded as an exogenous variable in one direction, it can have an endogenous relationship on the other. Findings emphasise the need to explicate information about the network nature of transportation and its endogenous relations with tourism.
    Keywords: Air transport liberalization; Direct air services; Endogeneity; Instrumental variable; LIML estimator; Tourism demand
    Date: 2017

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