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Measuring the Effect of Subsidization on Tourism Demand and Destination Competitiveness through the AIDS Model: An Evidence-Based Approach to Tourism Policymaking

Author

Listed:
  • Marie-Louise Mangion

    (Valletta, Malta)

  • Chris Cooper

    (Faculty of Business, Oxford Brookes University, Wheatley Campus, Wheatley, Oxford OX33 1HX, UK)

  • Isabel Cortés-Jimenez

    (National Research Institute of Science and Technology for Environment and Agriculture (IRSTEA), Domaine universitaire, 2 rue de la Papeterie, F-38402 Saint-Martin-d'Hères Cedex, France, and Research Quantitative Analysis (AQR-IREA), Universitat de Barcelona, Spain)

  • Ramesh Durbarry

    (UOM Trust Business School, Reduit, Mauritius)

Abstract

There is increasing recognition of the need for improved policymaking in tourism and the consequent evaluation of tourism public policies. This paper demonstrates the usefulness of econometric modelling for tourism policy analysis, showing that crucial information is generated from such econometric policy analysis. A dynamic Almost Ideal Demand System (AIDS) model is used to quantify the impact on demand elasticity of Malta's policy of supporting British inclusive tour holidays. Such analysis can contribute to improved policymaking as the policymaker is informed about how and to what extent the market has responded to previous policies – thus promoting an evidence-based approach to tourism policymaking.

Suggested Citation

  • Marie-Louise Mangion & Chris Cooper & Isabel Cortés-Jimenez & Ramesh Durbarry, 2012. "Measuring the Effect of Subsidization on Tourism Demand and Destination Competitiveness through the AIDS Model: An Evidence-Based Approach to Tourism Policymaking," Tourism Economics, , vol. 18(6), pages 1251-1272, December.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:6:p:1251-1272
    DOI: 10.5367/te.2012.0167
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    References listed on IDEAS

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