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. [Working Paper or Technical Report] (Submitted)
Available under License Creative Commons Attribution Non-commercial.
Official URL: http://eprints.ucm.es/14092/
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)|
Alston, J.M., Foster, K.A. & Green, R.D. (1994), Estimating elasticities with the linear approximate almost ideal demand systems, Economic Letters, 71, 351–356.
Alston, J.M., Foster, K.A. & Green, R.D. (1994), Estimating elasticities with the linear approximate almost ideal demand system: Some Monte Carlo results, Review of Economics and Statistics, 76, 351-356.
Anderson, G. & Blundell, R. (1983), Testing restrictions in a flexible dynamic demand system: An application to consumers’ expenditure in Canada, Review of Economic Studies, 50, 397-410.
Artus, J.R. (1972), An econometric analysis of international travel, IMF staff paper 19, 379-613.
Asche, F. & Wessells, C.R. (1997), On price indices in the almost ideal demand system, American Journal of Agricultural Economics, 79, 1182–1185.
Barten, A.P. (1969), Maximum likelihood estimation: A complete system of demand equations, European Economic Review, 1, 7-73.
Blundell, R., Browning, M. & Meghir, C. (1994), Consumer demand and life-cycle allocation of household expenditures, Review of Economic Studies, 61, 57-80.
Buse, A. (1996), Testing homogeneity in the linearized almost ideal demand system, Research paper No. 96-3, Department of Economics, University of Alberta. Chambers, M.J. (1993), Consumer’s demand in the long-run: Some evidence from UK data, Applied Economics, 25, 727-733.
Chambers, M.J. & Nowman, K.B. (1997), Forecasting with the almost ideal demand system: Evidence from some alternative dynamic specifications, Applied Economics, 29, 935-943.
Chang, C.-L. & McAleer, M. (2010), Aggregation, heterogeneous autoregression and volatility of daily international tourist arrivals and exchange rates. To appear in Japanese economic review. Available at SSRN: http://ssrn.com/abstract=1553377.
Cortés-Jiménez, I., Durbarry, R. & Pulina, M. (2009), Estimation of outbound Italian tourism demand: A monthly dynamic EC-LAID model, Tourism Economics, 15, 3, 547-565.
De Mello, M.M., Pack, A. & Sinclair, M.T. (2002), A system of equations model of UK tourism demand in neighbouring countries, Applied Economics, 34, 509‐521.
Deaton, A. & Muellbauer, J. (1980a), An almost ideal demand system, American Economic Review, 70(3), 312-326.
Deaton, A. & Muellbauer, J. (1980b), Economics and Consumer Behavior, Cambridge, UK, Cambridge University Press.
Divisekera, S. (1995), An econometric model of international visitors flows to Australia, Australian Economic Papers, 34, 291-308.
Divisekera, S. (2003), A model of demand for international tourism, Annals of Tourism Research, 30, 1-31.
Divisekera, S. (2009), An analysis of demand for international air transportation and tourism: Interactions and dependencies, Presented at the second conference of the International Association for Tourism Economics (IATE), Chiang Mai, Thailand.
Durbarry, R. & Sinclair, M.T. (2003), Market shares analysis: The case of French tourism demand, Annuals of Tourism Research, 30(4), 927-941.
Eales, J.S. & Unnevehr, L.J. (1993), Simultaneity and structural change in U.S. meat demand, American Journal of Agricultural Economics, 75, 2, 259-268.
Engle, R.F. & Granger, C.W.J. (1987), Cointegration and error correction: Representation, estimation and testing, Econometrica, 55, 251-276.
Franses, P.H. (1991a), Model selection and seasonality in time series, Tinbergen Institute Series, No.18, The Netherlands.
Franses, P.H. (1991b), Seasonality, non-stationarity and the forecasting of monthly time series, International Journal of Forecasting, 7, 199-208.
Franses, P.H. (1997), Critical values for unit root tests in seasonal time series, Journal of Applied Statistics, 24(1), 25-47.
Fujii, E., M. Khaled & J. Mark (1985), An almost ideal demand system for visitor expenditures, Journal of Transport Economics and Policy, 19, 161-171.
Granger, C.W.J. & Newbold, P. (1974), Spurious regressions in econometrics, Journal of Econometrics, 2, 111-120.
Green, R. & Alston, J.M. (1990), Elasticities in AID models, American Journal Agricultural Economics, 72, 442–445.
Green, R. & Alston, J.M. (1991), Elasticities in AID models: A clarification and extension, American Journal Agricultural Economics, 73, 874–875.
Hahn, W. (1994), Elasticities in AID models: Comments, American Journal Agricultural Economics, 76, 972–977.
Han, Z., Durbarry, R. & Sinclair, M.T. (2006), Modelling US tourism demand for European destinations, Tourism Management, 27(1), 1-10.
Hylleberg, S., Engle, R.F., Granger, C.W.J. & Yoo, B.S. (1990), Seasonal integration and cointegration, Journal of Econometrics, 44(2), 215-238.
Johansen, S. (1988), A statistical analysis of cointegration vectors, Journal of Economic Dynamics and Control, 12, 231-254.
Johnson, J.A., Oksanen, E.H., Veall, M.R. & Fretz, D. (1992), Short-run and long-run elasticities for Canadian consumption of alcoholic beverages: An error-correction mechanism/cointegration approach, Review of Economics and Statistics, 74, 64-74.
Johnson, P. & Ashworth, J. (1990), Modelling tourism demand: A summary review, Leisure Studies, 9, 145-160.
Kuo, H.-I., Chang, C.-L., Chen, C.-C., Huang, B.-W. & McAleer, M. (2009), Estimating the impact of Avian Flu on international tourism demand using panel data, Tourism Economics, 15(3), 501-511.
Lewbel, A. & Ng, S. (2005), Demand systems with nonstationary prices, Review of Economics & Statistics, 87(3), 479-497.
Li, G., Song, H., & Witt, S.F. (2004), Modeling tourism demand: A dynamic linear AID approach, Journal of Travel Research, 43(22), 141-150.
Li, G., Song, H., & Witt, S.F. (2006), Time varying parameter and fixed parameter linear AID: An application to tourism demand forecasting, International Journal of Forecasting, 22, 57-71.
Lyssiotou, P. (2001), Dynamic analysis of British demand for tourism abroad, Empirical Economics, 15, 421-436.
MacKinnon, J.G. (1996), Numerical distribution functions for unit root and cointegration tests, Journal of Applied Econometrics, 11, 601-618.
MacKinnon, J. G., Haug, A. A. & Michelis, L. (1999), Numerical distribution functions of likelihood ratio tests for cointegration, Journal of Applied Econometrics, 14, 5, 563-577.
Mangion, M.L., Durbarry, R. & Sinclair, M.T. (2005), Tourism competitiveness: Price and quality, Tourism Economics, 11(1), 45-68.
McAleer, M., Huang, B.-W., Kuo, H.-I., Chen, C.-C. & C.-L. Chang (2010), An econometric analysis of SARS and Avian Flu on international tourist arrivals to Asia, Environmental Modelling and Software, 25, 100-106.
Moschini, G. (1995), Units of measurement and the Stone index in demand system, American Journal of Agricultural Economics, 77, 63–68.
Moschini, G. (1998), The semiflexible almost ideal demand system, European Economics Review, 42, 346–364.
Moschini, G., D. Moro & R.D. Green. (1994), Maintaining and testing separability in demand systems, American Journal of Agricultural Economics, 76, 61-73.
O’Hagan, J.W. & Harrison, M.J. (1984), Market shares of US tourist expenditure in Europe: An econometric analysis, Applied Economics, 16, 919-931.
Papatheodorou, A. (1999), The demand for international tourism in the Mediterranean region, Applied Economics, 31(5), 619-630.
Parikh, A. (1988), An econometric study on estimation of trade shares using the almost ideal demand system in the world link, Applied Economics, 20, 1017- 1039.
Pashardes, P. (1993), Bias in estimating the almost ideal demand system with the stone index approximation, The Economic Journal, 103, 908-915.
Salman, A. (2003), Estimating tourist demand through cointegration analysis: Swedish data, Current Issues in Tourism, 6(4), 323-339.
Salman, A., Shukur, G. & Von Bergmann-Winberg, M. (2007), Comparison of econometric modelling for domestic and international tourism demand: Swedish data, Current Issues in Tourism, 10(4), 323-342.
Sheldon, P.J. (1990), A review of tourism expenditure research, in C. Cooper (ed.), Progress in Tourism, Recreation and Hospitality Management, 2, London: Belhaven.
Sinclair, M.T. (1991), The economics of tourism, in C. Cooper (ed.), Progress in Tourism, Recreation and Hospitality Management, 3, London: Belhaven Press.
Sinclair, M.T. (1998), Tourism and economic development: A survey, Journal of Development Studies, 34(5), 1-51.
Sinclair, M.T. & Stabler, M.J. (1997), The Economics of Tourism, London and New York, Routledge.
Sinclair, M.T. & Syriopoulos, T.C. (1993), An econometric study tourism demand: The AID model of U.S. and European tourism in Mediterranean countries, Applied Economics 25(12), 1541-1552.
Song, H. & Witt, S.F. (2000), Tourism Demand Modeling and Forecasting: Modern Econometric Approaches, Oxford, Elsevier.
Stone, R. (1953), The measurement of consumer’s expenditure and behavior in the United Kingdom 1920-1938, London, Cambridge University Press.
Thomson Reuters (2010), Reuter EcoWin Pro, Database.
Tourism Authority of Thailand (1998-2007), Annual Statistical Report on Tourism in Thailand 1998-2007, Bangkok.
White, K.J. (1982), The demand for international travel: A system-wide analysis for US travel to Western Europe, Discussion Paper No. 82/28, University of British Columbia.
White, K.J. (1985), An international travel demand model, US Travel to Western Europe, Annals of Tourism Research, 12(4), 529-545.
Wu, D., Song, H., & Li, G. (2008), Analysis of tourist expenditure in Hong Kong using dynamic AID model, paper presented at the CAUTHE 2008 Conference, Gold Coast, Australia.
Zellner, A. (1962), An efficient method of estimating seemingly unrelated regressions and tests for aggregation bias, Journal of the American Statistical Association, 57, 348-368.
|Deposited On:||10 Jan 2012 16:41|
|Last Modified:||15 Nov 2013 11:49|
Repository Staff Only: item control page