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Nowcasting Tourism Industry Performance Using High Frequency Covariates

Author

Listed:
  • Carl Bonham

    () (UH-Manoa Department of Economics, University of Hawaii Economic Research Organization)

  • Peter Fuleky

    () (UH-Manoa Department of Economics and University of Hawaii Economic Research Organization)

  • James Jones

    () (UH-Manoa Department of Economics and University of Hawaii Economic Research Organization)

  • Ashley Hirashima

    () (UH-Manoa Department of Economics and University of Hawaii Economic Research Organization)

Abstract

We evaluate the short term forecasting performance of methods that systematically incorporate high frequency information via covariates. Our study provides a thorough introduction of these methods. We highlight the distinguishing features and limitations of each tool and evaluate their forecasting performance in two tourism-specific applications. The first uses monthly indicators to predict quarterly tourist arrivals to Hawaii; the second predicts quarterly labor income in the accommodations and food services sector. Our results indicate that compared to the exclusive use of low frequency aggregates, including timely intra-period data in the forecasting process results in significant gains in predictive accuracy. Anticipating growing popularity of these techniques among empirical analysts, we present practical implementation guidelines to facilitate their adoption.

Suggested Citation

  • Carl Bonham & Peter Fuleky & James Jones & Ashley Hirashima, 2015. "Nowcasting Tourism Industry Performance Using High Frequency Covariates," Working Papers 2015-13R, University of Hawaii Economic Research Organization, University of Hawaii at Manoa, revised Jul 2016.
  • Handle: RePEc:hae:wpaper:2015-13r
    as

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    File URL: http://www.uhero.hawaii.edu/assets/WP_2015-13R.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Nowcast; Ragged edge; Mixed frequency models;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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