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on Tourism Economics |
| By: | Ding Ding; Yannick Timmer |
| Abstract: | We estimate exchange rate elasticities of international tourism. We show that, in addition to the bilateral exchange rate, the exchange rate between the tourism origin country vis-à-vis the U.S. dollar is an important driver of tourism flows, indicating a strong role of U.S. dollar pricing. The U.S. dollar exchange rate is more important for tourism destination countries with higher U.S. dollar borrowing, pointing toward a complementarity between U.S. dollar pricing and financing. Country-specific dominant currencies (CSDCs) play only a minor role for the average country but are important for tourism-dependent countries and those with a high concentration of tourists. The importance of the U.S. dollar exchange rate represents a strong piece of evidence of dominant currency pricing (DCP) in the international trade of services and suggests that the benefits of exchange rate flexibility for tourism-dependent countries may be weaker than previously thought. |
| Keywords: | exchange rates, trade, tourism, dominant currency pricing |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9743&r= |
| By: | Azam, Mehtabul (Oklahoma State University) |
| Abstract: | Using a nationally representative household survey from India, we examine individuals' domestic tourism participation and trip expenditure decisions together. We control for a large set of explanatory variables broadly classified as economic, socio-demographic and trip related characteristics. We use two-part (hurdle) model to allow explanatory variables to have differential affects on each decision. We find that education is an important determinant for both the decisions. Moreover, trip-related characteristics (party size, stay length, ac- commodation type, travel mode, and destination) are also important determinants of trip expenditure in addition to economic and socio-demographic characteristics. The unconditional quantile regression results show the heterogeneity in the impact of many variables across the trip expenditure distribution. The differences in trip expenditure across age-groups are primarily in the upper half of the trip expenditure distribution. A trip arranged under a tour package leads to an increase in trip expenditure at the higher quantiles of trip expenditure distribution. |
| Keywords: | unconditional quantile regression, two-part model, expenditure, tourism participation |
| JEL: | Z3 O12 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15245&r= |