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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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    Cited by:

    1. Villamediana, Jenely & Küster, Inés & Vila, Natalia, 2019. "Destination engagement on Facebook: Time and seasonality," Annals of Tourism Research, Elsevier, vol. 79(C).
    2. Godfrey Madigu & Luis A. Gil‐Alana, 2021. "What do productivity indices tell us? A case study of U.S. industries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 4946-4978, October.
    3. Luis A Gil-Alana & James E Payne, 2022. "Persistence, seasonality, and fractional integration within a nonlinear framework: Evidence from US citizens’ overseas travel," Tourism Economics, , vol. 28(3), pages 654-660, May.
    4. Luis A Gil-Alana & à gueda Gil-López & Elena San Román, 2021. "Tourism persistence in Spain: National versus international visitors," Tourism Economics, , vol. 27(4), pages 614-625, June.
    5. James E Payne & Junsoo Lee, 2024. "Global perspective on the permanent or transitory nature of shocks to tourist arrivals: Evidence from new unit root tests with structural breaks and factors," Tourism Economics, , vol. 30(1), pages 67-103, February.
    6. 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.
    7. Martin Thomas Falk & Eva Hagsten & Xiang Lin, 2022. "Domestic tourism demand in the North and the South of Europe in the Covid-19 summer of 2020," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 537-553, October.
    8. Luis A. Gil-Alana & OlaOluwa S. Yaya, 2021. "Testing fractional unit roots with non-linear smooth break approximations using Fourier functions," Journal of Applied Statistics, Taylor & Francis Journals, vol. 48(13-15), pages 2542-2559, November.
    9. Luis A. Gil‐Alana & Robert Mudida & OlaOluwa S. Yaya & Kazeem A. Osuolale & Ahamuefula E. Ogbonna, 2021. "Mapping US presidential terms with S&P500 index: Time series analysis approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1938-1954, April.

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    More about this item

    Keywords

    Iceland; Tourism time series; Long memory; Persistence; Policy;
    All these keywords.

    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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