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Panel threshold analysis of Taiwan's outbound visitors

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  • Che, Chou Ming

Abstract

The main purpose of this research is to explore the panel threshold effect of consumer prices in destination countries on the number of Taiwanese outbound visitors. It is assumed that a destination country's inflated prices contain one or more threshold values and have nonlinear relation with the number of Taiwanese people visiting that particular country, with asymmetric upper and lower boundaries. Scrutinizing 14 countries during a 14-year period (from 1998 to 2011), this study examines the panel threshold effects based on balanced panel data that comprises 196 observations. The empirical findings suggest the absence of any significant panel threshold effect, regardless of the assumed double or single threshold effect. According to an ensuing inter-segment symmetry analysis, impact factors within the range of study invariably indicated significantly positive relations, a sign that a destination country's consumer price index (CPI) has a positive linear relation with the number of Taiwanese people traveling abroad. In other words, the rising prices in destination countries do not reduce Taiwanese people's demand for traveling abroad. Instead, it reflects the improving economy as well as surging quality of life in a destination country that encourages refinement of products, perfects traveling facilities, and consequently lures quality-seeking tourists as well as Taiwanese outbound visitors. The finding gives a clear guidance that Taiwan's tourism policy shall add sophistication to services in every aspect.

Suggested Citation

  • Che, Chou Ming, 2013. "Panel threshold analysis of Taiwan's outbound visitors," Economic Modelling, Elsevier, vol. 33(C), pages 787-793.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:787-793
    DOI: 10.1016/j.econmod.2013.06.006
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    References listed on IDEAS

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    1. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
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    Cited by:

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    2. Batabyal, Amitrajeet A. & Beladi, Hamid, 2015. "Optimal transport provision to a tourist destination: A contract theory perspective," Economic Modelling, Elsevier, vol. 47(C), pages 180-184.
    3. Özcan Ceyhun Can & Uçak Harun, 2016. "Outbound Tourism Demand of Turkey: A Markov Switching Vector Autoregressive Approach," Czech Journal of Tourism, Sciendo, vol. 5(2), pages 59-72, December.
    4. Silva, Emmanuel Sirimal & Hassani, Hossein, 2022. "‘Modelling’ UK tourism demand using fashion retail sales," Annals of Tourism Research, Elsevier, vol. 95(C).
    5. Silva, Emmanuel Sirimal & Ghodsi, Zara & Ghodsi, Mansi & Heravi, Saeed & Hassani, Hossein, 2017. "Cross country relations in European tourist arrivals," Annals of Tourism Research, Elsevier, vol. 63(C), pages 151-168.
    6. Jun Zhang & Li Cheng, 2019. "Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China," Sustainability, MDPI, vol. 11(2), pages 1-22, January.

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