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Domestic and international visitor expenditure and growth in the Christchurch economy

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  • Fieger, Peter
  • Rice, John

Abstract

The city of Christchurch is the main gateway to New Zealand’s South Island and attracts a significant number of tourists every year. In 2010 and 2011, significant damage to the city’s building stock and infrastructure occurred as a result of two successive earthquakes. Consequently, Christchurch’s tourist arrivals and associated tourist spending declined significantly. However, the rebuilding efforts since 2011 and the re-opening of tourist facilities and infrastructure have led to a steady increase in visitor arrivals and expenditure. This paper investigates whether tourism expenditure as well as the prevailing exchange rate influence local gross domestic product for the city of Christchurch. We separate domestic and international expenditure analysis into two different vector auto-regression models followed by causality analysis to determine the direction of relationships between these three variables. Our results show that increased domestic and international visitor spending is followed by a measurable and significant increase of local GDP. Exchange rates have a small but non-significant impact on international tourist spending. We conclude that stimulating tourism is an essential element to achieve substantial economic growth in Christchurch.

Suggested Citation

  • Fieger, Peter & Rice, John, 2016. "Domestic and international visitor expenditure and growth in the Christchurch economy," MPRA Paper 75470, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75470
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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