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Tourism in Iceland: Persistence and seasonality

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  • Gil-Alana, Luis A.
  • Huijbens, Edward H.

Abstract

This paper analyses tourism in Iceland using fractional integration and taking into account the seasonality and the degree of persistence in the data. Using annual data, the unit root hypothesis cannot be rejected, implying permanency of shocks. However using, monthly data, a break is found at 2009m7 and the orders of integration are in the interval (0, 0,5) suggesting mean reversion. The conclusion is that exogenous shocks impacting inbound tourism do not persist and tend to disappear relatively fast. The key policy implications thereof are reported at the end of the paper, critiquing the classical response to perceived slumps in inbound tourism that include marketing and promotion instead of developing infrastructure in anticipation of resumed growth in inbound tourism.

Suggested Citation

  • Gil-Alana, Luis A. & Huijbens, Edward H., 2018. "Tourism in Iceland: Persistence and seasonality," Annals of Tourism Research, Elsevier, vol. 68(C), pages 20-29.
  • Handle: RePEc:eee:anture:v:68:y:2018:i:c:p:20-29
    DOI: 10.1016/j.annals.2017.11.002
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    References listed on IDEAS

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    Cited by:

    1. Gil-Alana, Luis A. & Mudida, Robert & Yaya, OlaOluwa S & Osuolale, Kazeem & Ogbonna, Ephraim A, 2019. "Influence of US Presidential Terms on S&P500 Index Using a Time Series Analysis Approach," MPRA Paper 93941, University Library of Munich, Germany.
    2. Gil-Alana, Luis A. & Yaya, OlaOluwa S, 2018. "Testing Fractional Unit Roots with Non-linear Smooth Break Approximations using Fourier functions," MPRA Paper 90516, University Library of Munich, Germany.

    More about this item

    Keywords

    Iceland; Tourism time series; Long memory; Persistence; Policy;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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