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Thailand's International Tourism Demand: Seasonal Panel Unit Roots and the Related Cointegration Model

Author

Listed:
  • Jintanee Jintranun

    () (School of Management, Walailak University, Thailand)

  • Songsak Sriboonchitta

    () (Faculty of Economics, Chiangmai University, Thailand)

  • Peter Calkins

    () (Faculty of Economics, Chiangmai University, Thailand)

  • Chukiat Chaiboonsri

    () (Faculty of Economics, Chiangmai University, Thailand)

Abstract

Tourism is the main service sector in Thailand. It generated about 6.5% of national income (GDP) in 2009. 547 billion baht came from international tourists and 380 billion baht from domestic tourists in 2008. This study analyzes panel data by using the seasonal unit roots test. Firstly, we apply the CHEGY-IPS panel seasonal unit roots test developed by Otero (2007). Secondly, we develop a long run relationship model to estimate the number of international tourists to Thailand from 1997 to 2010 using the generalized method of moments (GMM).The results reveal panel seasonal unit roots in all model variables: GDP of the tourists¡¯ country of origin, competitive ratio of CPI between Thailand and country of origin, currency exchange rates, and transportation costs. The results from cointegration estimation by the GMM demonstrate that there is a positive relationship between GDP and the number of international tourist arrivals: a 1% increase of GDP leading to an increase of 1.5% of the number of international tourists. Regarding the exchange rate, a negative relationship is found: a 1% stronger Thai currency will lead to a decrease of 0.55% in the number of international tourists. Lastly, season has a significant effect upon the number of tourists. The number of tourists in January to March is higher than in other quarters.

Suggested Citation

  • Jintanee Jintranun & Songsak Sriboonchitta & Peter Calkins & Chukiat Chaiboonsri, 2011. "Thailand's International Tourism Demand: Seasonal Panel Unit Roots and the Related Cointegration Model," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 63-76, June.
  • Handle: RePEc:bap:journl:110305
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    Keywords

    Tourism demand; Seasonal panel unit roots; GMM; Thailand; Panel data analysis;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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