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On the Relationship between Tourist Flows and Household Expenditure in Barbados: A Dynamic OLS Approach

Author

Listed:
  • Mahalia Jackman

    () (Central Bank of Barbados)

  • Troy Lorde

    () (University of the West Indies)

Abstract

Keynesians propose that increases in tourist arrivals are associated with an expansion in private spending through the multiplier effect. To test this hypothesis, this study augments a simple consumption function with tourist arrivals and employs the dynamic OLS method to compute the short and long run relationships of the variables. Results suggest that while tourist arrivals have a positive correlation with household expenditure in the short run, it does not Granger cause household expenditure consumption.

Suggested Citation

  • Mahalia Jackman & Troy Lorde, 2010. "On the Relationship between Tourist Flows and Household Expenditure in Barbados: A Dynamic OLS Approach," Economics Bulletin, AccessEcon, vol. 30(1), pages 472-481.
  • Handle: RePEc:ebl:ecbull:eb-09-00486
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I1-P42.pdf
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    References listed on IDEAS

    as
    1. Edgar J Sanchez Carrera & W. Adrian Risso & Juan Gabriel Brida, 2008. "Tourism's Impact on Long-Run Mexican Economic Growth," Economics Bulletin, AccessEcon, vol. 3(21), pages 1-8.
    2. Markku Lanne & Helmut Lütkepohl & Pentti Saikkonen, 2002. "Comparison of unit root tests for time series with level shifts," Journal of Time Series Analysis, Wiley Blackwell, vol. 23(6), pages 667-685, November.
    3. Saikkonen, Pentti, 1991. "Asymptotically Efficient Estimation of Cointegration Regressions," Econometric Theory, Cambridge University Press, vol. 7(1), pages 1-21, March.
    4. repec:ebl:ecbull:v:3:y:2008:i:21:p:1-8 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Ertugrul, Hasan Murat & Mangir, Fatih, 2012. "The tourism-led growth hypothesis: empirical evidence from Turkey," MPRA Paper 96419, University Library of Munich, Germany.
    2. Osinubi, Tolulope Temilola & Osinubi , Olufemi Bankole, 2020. "Inclusive Growth in Tourism-led Growth Hypothesis: Evidence from Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 8(2), July.
    3. Brida, Juan Gabriel & Pereyra, Juan Sebastián & Such, María Jesús & Pulina, Manuela, 2011. "Causalidad entre turismo y crecimiento económico de largo plazo: una revisión crítica de la literatura econométrica [Causality between tourism and long-term economic growth: a critical review of th," MPRA Paper 37332, University Library of Munich, Germany, revised 2011.

    More about this item

    Keywords

    Tourism; Consumption; Barbados; Dynamic OLS;

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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