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Thailand's Long-Run Tourism Demand Elasticities

Author

Listed:
  • Akarapong Untong

    (Public Policy Studies Institute, Chiang Mai University, 145/5 Moo 1 T. Chang Puek A. Muang, Chiang Mai 50200, Thailand)

  • Vicente Ramos

    (Department of Applied Economics, University of the Balearic Islands, Ctra Valldemossa, Km 7.5, Palma 07122, Spain)

  • Mingsarn Kaosa-Ard

    (Public Policy Studies Institute, Chiang Mai University, 145/5 Moo 1 T. Chang Puek A. Muang, Chiang Mai 50200, Thailand)

  • Javier Rey-Maquieira

    (Department of Applied Economics, University of the Balearic Islands, Ctra Valldemossa, Km 7.5, Palma 07122, Spain)

Abstract

This paper estimates Thailand's long-run tourism demand elasticities for a set of origin countries by applying dynamic ordinary least squares. A detailed analysis of the potential competing destinations for each origin country is performed to ensure a precise coefficient for the substituting elasticity. A long-run static model of time varying parameter is then used to analyse the effects on the estimation of a potential structural change caused by the 1997 economic crisis and the subsequent change in exchange rate policy. The results show that there are different demand elasticities for each origin market and that own price elasticity is lower than substituting price elasticity for most origin countries. These findings indicate that price-setting strategies should be specific for each origin market and that information about prices in competing destinations needs to be considered. Moreover, the results show that there was a structural change in 1997 that severely affected the estimation.

Suggested Citation

  • Akarapong Untong & Vicente Ramos & Mingsarn Kaosa-Ard & Javier Rey-Maquieira, 2014. "Thailand's Long-Run Tourism Demand Elasticities," Tourism Economics, , vol. 20(3), pages 595-610, June.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:3:p:595-610
    DOI: 10.5367/te.2013.0280
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    References listed on IDEAS

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    Cited by:

    1. Jianxu Liu & Vicente Ramos & Bing Yang & Mengjiao Wang & Songsak Sriboonchitta, 2024. "Analysing the dynamic co-movement between tourism and expected economic growth considering extreme events," Tourism Economics, , vol. 30(1), pages 3-26, February.
    2. Hongru Zhang & Yang Yang, 2019. "Prescribing for the tourism-induced Dutch disease: A DSGE analysis of subsidy policies," Tourism Economics, , vol. 25(6), pages 942-963, September.

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