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Research Note: Employment and Wage Sensitivity to Tourism Activities – The Case of US Tourist Arrivals and Expenditure in Hawaii

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  • Junwook Chi

    (School of Travel Industry Management, University of Hawaii at Manoa, 2560 Campus Road, George Hall 346, Honolulu, HI 96822, USA)

Abstract

This study explores the dynamic effects of US employment, real wages, employee overtime hours, travel costs and market shocks on tourism demand to Hawaii from the US mainland. The results show that US tourist arrivals and expenditure in Hawaii are sensitive to a change in total employment. These findings suggest that employment growth is a driving force of US tourism demand for Hawaii. In examining the magnitudes of the income and substitution effects of a change in real wages, the income effect is found to outweigh its substitution effect, indicating that a rise in income resulting from a higher wage increases tourist expenditure in the USA. In addition, the 2001 terrorist attacks and the 2008 financial crisis have had detrimental impacts on tourism demand for Hawaii destinations.

Suggested Citation

  • Junwook Chi, 2016. "Research Note: Employment and Wage Sensitivity to Tourism Activities – The Case of US Tourist Arrivals and Expenditure in Hawaii," Tourism Economics, , vol. 22(1), pages 171-178, February.
    • Handle: RePEc:sae:toueco:v:22:y:2016:i:1:p:171-178
    DOI: 10.5367/te.2014.0422
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    References listed on IDEAS

    as
    1. Chi, Junwook & Baek, Jungho, 2013. "Dynamic relationship between air transport demand and economic growth in the United States: A new look," Transport Policy, Elsevier, vol. 29(C), pages 257-260.
    2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    3. Carl Bonham & Christopher Edmonds & James Mak, 2006. "The Impact of 9/11 and Other Terrible Global Events on Tourism in the U.S. and Hawaii," Economics Study Area Working Papers 87, East-West Center, Economics Study Area.
    4. James E. Payne & Andrea Mervar, 2002. "A Note on Modelling Tourism Revenues in Croatia," Tourism Economics, , vol. 8(1), pages 103-109, March.
    5. Peter Fuleky & Carl S. Bonham & Qianxue Zhao, 2013. "Estimating Demand Elasticities in Non-Stationary Panels: The Case of Hawaii Tourism," Working Papers 2013-2R, University of Hawaii Economic Research Organization, University of Hawaii at Manoa, revised Aug 2013.
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    Cited by:

    1. Mehmet Balcilar & Sahar Aghazadeh & George N Ike, 2021. "Modelling the employment, income and price elasticities of outbound tourism demand in OECD countries," Tourism Economics, , vol. 27(5), pages 971-990, August.

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