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Does Exchange Rate Volatility Affect Tourist Arrival In India: A Quantile Regression Approach

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  • Sangram Keshari JENA
  • Aruna Kumar DASH

Abstract

In this study, we examine the degree and structure of the impact of exchange rate change and volatility on tourist arrival in India by using Quantile Regression Analysis (QRA) during January 1990 to March 2015. The study made the use of inbound tourist arrival as the dependent variable and world GDP per capita, nominal Indian Rupee/US Dollar exchange rate and exchange rate volatility as the independent variable. We have studied the impact of exchange rate on tourist arrival in the world and top 10 counties context. As far as impact of exchange rate change is concerned, the results are contrasted with both the measures of tourist arrival. In the case of total tourist arrival in India, the impact is positive which means deprecation (appreciation) of domestic currency has a positive (negative) in normal to bad phases of tourist arrivals. But in case of top ten countries, deprecation (appreciation) of domestic currency, the impacts tourist arrival at extreme good and bad phases negatively (positively). However, for these top ten countries, the per capita income of the respective countries is much more important as it has a strong positive impact on all conditions of tourist arrival. Similar impact is observed for exchange rate volatility too. Further, the impact of exchange rate both change and volatility is found asymmetric at different condition of tourist arrival from top ten countries. So, the same tourism policy may not work in all the situations. Thus, the policy makers should come out with suitable tourism policy appropriate for different conditions of tourist arrival.

Suggested Citation

  • Sangram Keshari JENA & Aruna Kumar DASH, 2020. "Does Exchange Rate Volatility Affect Tourist Arrival In India: A Quantile Regression Approach," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 20(2), pages 65-78.
    • Handle: RePEc:eaa:eerese:v:20:y2020:i:2_5
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    5. Cüneyt Kılıç & Yılmaz Bayar, 2014. "Effects of Real Exchange Rate Volatility on Tourism Receipts and Expenditures in Turkey," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 4(1), pages 1-5.
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    Cited by:

    1. Shaidathul Jemin, 2023. "The Relationship between Macroeconomic Factors and Tourism Demand for OIC Countries ," GATR Journals jber238, Global Academy of Training and Research (GATR) Enterprise.

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    More about this item

    Keywords

    Tourist arrivals; exchange rate volatility; Quantile regression analysis; India.;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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