IDEAS home Printed from
   My bibliography  Save this paper

Testing Alternative Dynamic Systems for Modelling Tourism Demand


  • Maria M. De Mello

    () (CETE, Faculdade de Economia, Universidade do Porto)

  • Natércia Fortuna

    () (CEMPRE, Faculdade de Economia, Universidade do Porto)


The goals in this paper are to contribute an empirical study of tourism demand dynamics, and to point out areas where the scrutiny of relationships between theoretical and empirical considerations are likely to produce new insights in this area of research. A flexible general form of a Dynamic Almost Ideal Demand System (DAIDS) is derived to analyse the UK tourism demand for its geographically proximate neighbours Portugal, Spain and France, in the period 1969-1997. Nested within the general dynamic structure are Deaton and Muellbauer’s static AIDS model itself, the partial adjustment model and the auto-regressive distributed lag model, which are tested against the general dynamic alternative. The empirical results obtained show that DAIDS is a data coherent and theoretically consistent model, providing evidence of the robustness of this methodology to conduct tourism demand analysis in a temporal context. Moreover, the dynamic model offers statistically strong evidence on the inadequacy of the orthodox static AIDS and the other restricted models to reconcile consistently data and theory within their formulations. Estimates for tourism price and expenditure elasticities are obtained, permitting a comparative analysis of the relative magnitudes and statistical relevance of long and short run sensitivity of the UK tourism demand to changes in its determinants.

Suggested Citation

  • Maria M. De Mello & Natércia Fortuna, 2005. "Testing Alternative Dynamic Systems for Modelling Tourism Demand," CEF.UP Working Papers 0501, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:cetedp:0501

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Maria De Mello & Alan Pack & M. Thea Sinclair, 2002. "A system of equations model of UK tourism demand in neighbouring countries," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 509-521.
    2. Panayiota Lyssiotou, 2000. "Dynamic analysis of British demand for tourism abroad," Empirical Economics, Springer, vol. 25(3), pages 421-436.
    3. Maria De Mello & Kevin Nell, 2005. "The forecasting ability of a cointegrated VAR system of the UK tourism demand for France, Spain and Portugal," Empirical Economics, Springer, vol. 30(2), pages 277-308, September.
    4. Gordon Anderson & Richard Blundell, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," Review of Economic Studies, Oxford University Press, vol. 50(3), pages 397-410.
    5. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, May.
    6. Banerjee, Anindya & Hendry, David F & Mizon, Grayham E, 1996. "The Econometric Analysis of Economic Policy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(4), pages 573-600, November.
    7. Anderson, Gordon & Blundell, Richard, 1984. "Consumer Non-Durables in the U.K. A Dynamic Demand System," Economic Journal, Royal Economic Society, vol. 94(376a), pages 35-44, Supplemen.
    8. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:eee:touman:v:32:y:2011:i:4:p:759-769 is not listed on IDEAS
    2. repec:eee:touman:v:45:y:2014:i:c:p:181-193 is not listed on IDEAS
    3. Farai Jena & Barry Reilly, 2013. "The determinants of United Kingdom student visa demand from developing countries," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-22, December.
    4. Bonham, Carl & Gangnes, Byron & Zhou, Ting, 2009. "Modeling tourism: A fully identified VECM approach," International Journal of Forecasting, Elsevier, vol. 25(3), pages 531-549, July.
    5. Wani, M.H. & Paul, Ranjit Kumar & Bazaz, Naseer H. & Manzoor, M., 2015. "Market integration and Price Forecasting of Apple in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 70(2).
    6. repec:eee:touman:v:45:y:2014:i:c:p:159-170 is not listed on IDEAS

    More about this item


    Tourism Demand; dynamic almost ideal system; partial adjustment system; autoregressive distributed lag system.;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:por:cetedp:0501. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Bonanca) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.