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Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia

Chang, Chia-Lin and Khamkaew, Thanchanok and McAleer, Michael (2012) Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 02, 2012, ] (Submitted)

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Abstract

This paper analyzes the responsiveness of Thai outbound tourism to East Asian destinations, namely China, Hong Kong, Japan, Taiwan and Korea, to changes in effective relative price of tourism, total real total tourism expenditure, and one-off events. The nonlinear and linear Almost Ideal Demand (AID) models are estimated using monthly data to identify the price competitiveness and interdependencies of tourism demand for competing destinations in both long run (static) and short run error correction (dynamic) specifications. Homogeneity and symmetry are imposed in the long run and short run AID models to estimate the elasticities. The income and price elasticities provide useful information for public and private tourism agents at the various destinations to maintain and improve price competitiveness. The empirical results show that price competitiveness is important for tourism demand for Japan, Korea and Hong Kong in the long run, and for Hong Kong and Taiwan in the short run.


Item Type:Working Paper or Technical Report
Additional Information:

JEL classifications: C3, C5, D12, L83.
The authors are grateful to Ravee Phoewhawm for technical support. For financial support, the first author is grateful to the National Science Council, Taiwan, the second author thanks the Office of Higher Education Commission, Ministry of Education, Thailand, for a CHE-PhD 2550 scholarship, and the third author acknowledges the Australian Research Council, National Science Council, Taiwan, and the Japan Society for the Promotion of Science.

Uncontrolled Keywords:Almost Ideal Demand (AID) model, Tourism demand, Price competitiveness, Substitutes, Budget shares, Error correction.
Subjects:Social sciences > Economics > Tourism
Social sciences > Economics > Econometrics
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2012
Number:02
ID Code:14092
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Deposited On:10 Jan 2012 15:41
Last Modified:06 Feb 2014 09:59

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