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Modelling interstate tourism demand in Australia: A cointegration approach

Author

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  • Allen, David
  • Yap, Ghialy
  • Shareef, Riaz

Abstract

Interstate tourism is an important component of the domestic tourism business in Australia. However, empirical analyses of interstate tourism demand have not been previously undertaken. The motivation for this paper is to investigate the short- and long-run causal relationships between economic factors and interstate tourism demand in Australia. Using a cointegration approach, this study discovers two distinct results. First, Australian household income, accommodation prices, prices of recreation and restaurants, and domestic airfares have significant impacts on the demand in the short-run. Second, some of the long-run economic coefficients show incorrect signs, which contradict the theory of consumer demand.

Suggested Citation

  • Allen, David & Yap, Ghialy & Shareef, Riaz, 2009. "Modelling interstate tourism demand in Australia: A cointegration approach," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 79(9), pages 2733-2740.
  • Handle: RePEc:eee:matcom:v:79:y:2009:i:9:p:2733-2740
    DOI: 10.1016/j.matcom.2008.10.006
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    References listed on IDEAS

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    1. C. R. McKenzie, 1998. "Microfit 4.0," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 77-89.
    2. Christine Lim, 2006. "A Survey of Tourism Demand Modelling Practice: Issues and Implications," Chapters,in: International Handbook on the Economics of Tourism, chapter 1 Edward Elgar Publishing.
    3. Vasilios Patsouratis & Zoe Frangouli & George Anastasopoulos, 2005. "Competition in tourism among the Mediterranean countries," Applied Economics, Taylor & Francis Journals, vol. 37(16), pages 1865-1870.
    4. Hultkrantz,L., 1995. "On Determinants of Swedish Recreational Domestic and Outbound Travel,1989-1993," Papers 7, Uppsala - Working Paper Series.
    5. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    6. Christine Lim & Michael McAleer, 2001. "Cointegration analysis of quarterly tourism demand by Hong Kong and Singapore for Australia," Applied Economics, Taylor & Francis Journals, vol. 33(12), pages 1599-1619.
    7. Perron, Pierre, 1990. "Testing for a Unit Root in a Time Series with a Changing Mean," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(2), pages 153-162, April.
    8. McAleer, Michael, 1994. " Sherlock Holmes and the Search for Truth: A Diagnostic Tale," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 317-370, December.
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    Cited by:

    1. Deng, Minfeng & Athanasopoulos, George, 2011. "Modelling Australian domestic and international inbound travel: a spatial–temporal approach," Tourism Management, Elsevier, vol. 32(5), pages 1075-1084.
    2. repec:eee:touman:v:45:y:2014:i:c:p:159-170 is not listed on IDEAS
    3. repec:eee:touman:v:40:y:2014:i:c:p:193-202 is not listed on IDEAS
    4. repec:eee:touman:v:32:y:2011:i:3:p:564-575 is not listed on IDEAS
    5. Yap, Ghialy, 2013. "The impacts of exchange rates on Australia's domestic and outbound travel markets," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 93(C), pages 139-150.

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