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Examining the behaviour of visitor arrivals to Australia from 28 different countries

  • Narayan, Paresh Kumar

Testing the integrational properties of visitor arrivals has important implications for policy, for if visitor arrivals are integrated of order one (nonstationary) then it implies that shocks to visitor arrivals are permanent. However, if visitor arrivals are found to be integrated or order zero (stationary) then this implies that shocks to visitor arrivals are temporary. In this paper we examine whether visitor arrivals to Australia are stationary or nonstationary, using the recently developed univariate and panel Lagrange multiplier tests, and the Im, Pesaran and Shin [Im, K.S., Pesaran, M.H., Shin, Y., 1997. Testing for Unit Roots in Heterogeneous Panels. Manuscript, Department of Applied Economics, University of Cambridge; Im, K.S., Pesaran, M.H., Shin, Y., 2003. Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115, 53-74] panel t-test. Our exercise involves Australia's 28 tourist source markets. Our main findings are: (1) that visitor arrivals to Australia from 28 tourist source markets are stationary, implying that any shock will have only a temporary effect and (2) the second structural break, which mainly coincides with the September 11 terrorist attacks and the Asian financial crisis, has slowed down the growth rate in visitor arrivals to Australia from 22 out of 28 (79%) of the tourism source markets.

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Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 42 (2008)
Issue (Month): 5 (June)
Pages: 751-761

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Handle: RePEc:eee:transa:v:42:y:2008:i:5:p:751-761
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  1. Schmidt, Peter & Phillips, C B Peter, 1992. "LM Tests for a Unit Root in the Presence of Deterministic Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 257-87, August.
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  8. Junsoo Lee & Mark C. Strazicich, 2003. "Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1082-1089, November.
  9. Mita Bhattacharya & Paresh Kumar Narayan, 2005. "Testing for the random walk hypothesis in the case of visitor arrivals: evidence from Indian tourism," Applied Economics, Taylor & Francis Journals, vol. 37(13), pages 1485-1490.
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