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A Comparison of Two Econometric Models (OLS and SUR) for Forecasting Croatian Tourism Arrivals


  • Tihomir Stučka


Tourism receipts have a large impact on the Croatian economy. The large inflow of foreign exchange during the summer season provides not just income but also a stabilising effect on the local currency, the kuna. The author compares two demand models using OLS and SUR estimation techniques. The model is a system of equations covering five countries, which represent around 72%-78% of total foreign annual arrivals. The model describes arrivals to be a function of the home country’s real GDP and the real exchange rate. Based on estimates of forecasting accuracy, it seems that the SUR model yields more precise predictions of foreign arrivals.

Suggested Citation

  • Tihomir Stučka, 2002. "A Comparison of Two Econometric Models (OLS and SUR) for Forecasting Croatian Tourism Arrivals," Working Papers 8, The Croatian National Bank, Croatia.
  • Handle: RePEc:hnb:wpaper:8

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    References listed on IDEAS

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    More about this item


    tourism demand; forecasting; Croatia;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods


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