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A system of equations model of UK tourism demand in neighbouring countries


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  • Maria De Mello
  • Alan Pack
  • M. Thea Sinclair
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    This paper uses a system of equations model to examine tourism demand during periods of destination country transition and integration into the wider international community. The Almost Ideal Demand System model is applied to the UK demand for tourism in the neighbouring destinations, France, Spain and Portugal. Spain and Portugal are interesting cases as, during the period under consideration, they experienced a process of transition from economies with characteristics typical of developing countries, only entering the World Bank's industrialized countries classification in the 1980s. The paper examines the evolution of tourism demand during these countries' transition from 'developing' to 'developed' status. Consideration of France as a neighbouring destination also allows the behaviour of tourism demand to be compared between relatively rich and poor countries. The results show the extent to which the cross-country behaviour of demand becomes more or less similar over time with respect to changes in expenditure and effective prices. The expenditure elasticities are greater for Spain than France during the initial period, indicating that tourism can assist countries to 'catch-up' with their richer neighbours. However, this outcome is not always the case and may not persist, as Portugal had a low initial expenditure elasticity and Spain's relatively high expenditure elasticity decreased over time. Destinations' sensitivity to changes in their own and competitors' prices can also change over time, as indicated by the increases in the own- and cross-price elasticities for Spain, compared with the decreases for France and Portugal. The cross-price elasticity estimates indicate substitutability between the immediate neighbours, Portugal and Spain, and France and Spain.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 34 (2002)
    Issue (Month): 4 ()
    Pages: 509-521

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    Handle: RePEc:taf:applec:v:34:y:2002:i:4:p:509-521

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    Cited by:
    1. Maria M. De Mello & Natércia Fortuna, 2005. "Testing Alternative Dynamic Systems for Modelling Tourism Demand," CEF.UP Working Papers 0501, Universidade do Porto, Faculdade de Economia do Porto.
    2. Chia-Lin Chang & Thanchanok Khamkaew & Michael McAleer, 2010. "Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia," KIER Working Papers 725, Kyoto University, Institute of Economic Research.
    3. Tanja Kosi & Štefan Bojnec, 2010. "Tax Competitiveness of Croatia and Slovenia as Tourist Destinations," Academica Turistica - Tourism and Innovation Journal, University of Primorska, Faculty of Tourism Studies - Turistica,, vol. 3(1-2), pages 38-52.
    4. David C Broadstock & Xun Chen, 2012. "A possible role for discriminatory fuel duty in reducing the emissions from road transport: Some UK evidence," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 136, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
    5. Duha Altindag, 2014. "Crime and International Tourism," Journal of Labor Research, Springer, vol. 35(1), pages 1-14, March.
    6. Luiz Moutinho & K.-H. Huarng & Tiffany Yu & C.-Y. Chen, 2008. "Modeling and forecasting tourism demand: the case of flows from Mainland China to Taiwan," Service Business, Springer, vol. 2(3), pages 219-232, September.
    7. Camilo Sarmiento & Richard Just, 2005. "Empirical modelling of the aggregation error in the representative consumer model," Applied Economics, Taylor & Francis Journals, vol. 37(10), pages 1163-1175.
    8. Njegovan, Nenad, 2006. "Elasticities of demand for leisure air travel: A system modelling approach," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 33-39.
    9. Li, Gang & Song, Haiyan & Witt, Stephen F., 2006. "Time varying parameter and fixed parameter linear AIDS: An application to tourism demand forecasting," International Journal of Forecasting, Elsevier, vol. 22(1), pages 57-71.


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