Causality in direct air services and tourism demand

Tay-Ryang Koo, Christine Lim and Frédéric Dobruszkes

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: Unlike income or relative prices, air transport attributes and tourism demand on a given route can be endogenous. Using instrumental variables, this study attempted to account for the circular causality in estimating the effect of direct air service on tourism demand. Although we found evidence of endogeneity, the nature of the circular causation is context-specific; while direct air service can be regarded as an exogenous variable in one direction, it can have an endogenous relationship on the other. Findings emphasise the need to explicate information about the network nature of transportation and its endogenous relations with tourism.

Keywords: Air transport liberalization; Direct air services; Endogeneity; Instrumental variable; LIML estimator; Tourism demand (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-tre and nep-tur
Note: SCOPUS: ar.j
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Citations: View citations in EconPapers (15)

Published in: Annals of tourism research (2017) v.67,p.67-77

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Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/259047

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