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Inflation and Hospitality Industry Prices

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  • Sergej Gričar
  • Štefan Bojnec

Abstract

This paper investigates the dynamics of inflation and hospitality industry prices in a stochastic time-series framework using unit root tests, cointegration, and the vector error correction model in the seasonally unadjusted data from January 2000 to December 2011 by using the data expressed in the levels, which are near random walk. The cointegration relation implies a common stochastic trend of variables, which are modeled in the empirical analysis. Inflation rate and hospitality industry prices are found to be integrated of order one with a nonzero mean, suggesting that the present level of prices can be composed as a sum of all the previous shocks to inflation and hospitality industry prices. The general price level has an effect on hospitality industry prices in the short run, but less in the long-term equilibrium price relation in the dynamic specifications.

Suggested Citation

  • Sergej Gričar & Štefan Bojnec, 2013. "Inflation and Hospitality Industry Prices," Eastern European Economics, Taylor & Francis Journals, vol. 51(3), pages 91-108, May.
    • Handle: RePEc:mes:eaeuec:v:51:y:2013:i:3:p:91-108
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    Cited by:

    1. P. R. Weerathunga & Cheng Xiaofang & W. H. M.S. Samarathunga & P. M. B. Jayathilake, 2020. "The Relative Effect of Growth of Economy, Industry Expansion, and Firm-Specific Factors on Corporate Hotel Performance in Sri Lanka," SAGE Open, , vol. 10(2), pages 21582440209, April.
    2. Waqar Badshah & Mehmet Bulut, 2020. "Model Selection Procedures in Bounds Test of Cointegration: Theoretical Comparison and Empirical Evidence," Economies, MDPI, vol. 8(2), pages 1-23, June.

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