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

Chia-Lin Chang (), Thanchanok Khamkaew () and Michael McAleer

No 2012-02, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

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.

Keywords: Almost Ideal Demand (AID) model; Tourism demand; Price competitiveness; Substitutes; Budget shares; Error correction. (search for similar items in EconPapers)
JEL-codes: C3 C5 D12 L83 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2012
New Economics Papers: this item is included in nep-sea and nep-tur
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https://eprints.ucm.es/id/eprint/14092/1/1202.pdf (application/pdf)

Related works:
Working Paper: Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia (2010)
Working Paper: Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia (2010)
Working Paper: Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia (2010)
Working Paper: Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia (2010)
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