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Estimating the Swedish and Norwegian International Tourism Demand using ISUR Technique

Author

Listed:
  • Salman, Khalik

    (Mid Sweden University)

  • Arnesson, Leif

    (Mid Sweden University)

  • Sörensson, Anna

    (Mid Sweden University)

  • Shukur, Ghazi

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

This paper estimates the demand for tourism to Sweden and Norway for five countries: Denmark, the United Kingdom, Switzerland, Japan, and the United States. For each visiting country, and for Sweden and Norway, we specify separate equations by including relative information. We then estimate these equations using Zellner’s Iterative Seemingly Unrelated Regressions (ISUR). The benefit of this model is that the ISUR estimators utilize the information present in the error correlation of the cross regressions (or equations) and hence are more efficient than single equation estimation methods such as ordinary least squares. Monthly time series data from 1993:01 to 2006:12 are used. The results show that the consumer price index, some lagged dependent variables, and several monthly dummies (representing seasonal effects) have a significant impact on the number of visitors to the SW6 region in Sweden and Tröndelag in Norway. We also find that, in at least some cases, relative prices and exchange rates have a significant effect on international tourism demand.

Suggested Citation

  • Salman, Khalik & Arnesson, Leif & Sörensson, Anna & Shukur, Ghazi, 2009. "Estimating the Swedish and Norwegian International Tourism Demand using ISUR Technique," Working Paper Series in Economics and Institutions of Innovation 198, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0198
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    References listed on IDEAS

    as
    1. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
    2. Godfrey, Leslie G, 1978. "Testing for Higher Order Serial Correlation in Regression Equations When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1303-1310, November.
    3. Ghazi Shukur, 2002. "Dynamic specification and misspecification in systems of demand equations: a testing strategy for model selection," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 709-725.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    tourism demand; significant factors; Iterative Seemingly Unrelated Regressions (ISUR);

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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