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The Empirical Test on the Impact of Climate Volatility on Tourism Demand: A Case of Japanese Tourists Visiting Korea

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  • Yun Seop Hwang

    (Department of International Business and Trade, College of Politics and Economics KyungHee University, Seoul 02447, Korea)

  • Hyung Sik Harris Kim

    (Research Department, The Bank of Korea, Seoul 04514, Korea)

  • Cheon Yu

    (The International Trade Research Center at KyungHee University, Seoul 02447, Korea)

Abstract

As climate is not only a valuable tourism resource but also a factor influencing travel experience, estimating climate volatility has implications for sustainable development of the tourism industry. This study develops the Climate Volatility Index (CVI) using a Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model and estimates the relationship between CVI and Japanese tourism demand in Korea, using a tourism demand model based on monthly data from January 2000 to December 2013. Possible time lags and multicollinearity among variables are considered for the model specification. The results show that an increase in climate volatility leads to a decrease in tourism demand.

Suggested Citation

  • Yun Seop Hwang & Hyung Sik Harris Kim & Cheon Yu, 2018. "The Empirical Test on the Impact of Climate Volatility on Tourism Demand: A Case of Japanese Tourists Visiting Korea," Sustainability, MDPI, vol. 10(10), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3569-:d:173977
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    References listed on IDEAS

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    3. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    4. Nikolaos Dritsakis, 2004. "Tourism as a Long-Run Economic Growth Factor: An Empirical Investigation for Greece Using Causality Analysis," Tourism Economics, , vol. 10(3), pages 305-316, September.
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    1. Silvia Alonso-Pérez & Javier López-Solano & Lourdes Rodríguez-Mayor & José Miguel Márquez-Martinón, 2021. "Evaluation of the Tourism Climate Index in the Canary Islands," Sustainability, MDPI, vol. 13(13), pages 1-12, June.

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