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Domestic and outbound tourism demand in Australia: a System-of-Equations Approach

Author

Listed:
  • George Athanasopoulos
  • Minfeng Deng
  • Gang Li
  • Haiyan Song

Abstract

This study uses a system-of-equations approach to model the substitution relationship between Australian domestic and outbound tourism demand. A new price variable based on relative ratios of purchasing power parity index is developed for the substitution analysis. Short-run demand elasticities are calculated based on the estimated dynamic almost ideal demand system. The empirical results reveal significant substitution relationships between Australian domestic tourism and outbound travel to Asia, the UK and the US. This study provides scientific support for necessary policy considerations to promote domestic tourism further.

Suggested Citation

  • George Athanasopoulos & Minfeng Deng & Gang Li & Haiyan Song, 2013. "Domestic and outbound tourism demand in Australia: a System-of-Equations Approach," Monash Econometrics and Business Statistics Working Papers 6/13, Monash University, Department of Econometrics and Business Statistics.
    • Handle: RePEc:msh:ebswps:2013-6
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    File URL: http://business.monash.edu/econometrics-and-business-statistics/research/publications/ebs/wp06-13.pdf
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    References listed on IDEAS

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    Keywords

    domestic tourism; substitution; almost ideal demand system; purchasing power parity; Australia;
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