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An Error Correction Analysis of Visitor Arrivals to the Bahamas

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  • Charles, Jacky S.
  • Fullerton, Thomas M., Jr.

Abstract

Tourism is the major domestic export for many countries in the Caribbean region. Given this, the variables which influence tourism demand in this region, as well as accurate forecasts, can assist policy makers in their planning efforts and growth strategies. This study utilizes error correction models (ECMs) to analyze tourism demand in the Bahamas. Findings suggest that income and habit persistence/word of mouth advertising are the primary determinants of tourism demand in the Bahamas, while the cost of travel is generally insignificant. To further assess model reliability, forecasts of the ECMs are compared to random walk and random walk with drift benchmarks. The study finds that while the ECMs provide fairly reliable forecasts, their performances are not superior to those provided by random walk benchmarks.

Suggested Citation

  • Charles, Jacky S. & Fullerton, Thomas M., Jr., 2012. "An Error Correction Analysis of Visitor Arrivals to the Bahamas," MPRA Paper 43064, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:43064
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Tourism; Error Correction Analysis; Forecasts; Bahamas;
    All these keywords.

    JEL classification:

    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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