On the Relationship between Tourist Flows and Household Expenditure in Barbados: A Dynamic OLS Approach

Mahalia Jackman and Troy Lorde

Economics Bulletin, 2010, vol. 30, issue 1, 472-481

Abstract: Keynesians propose that increases in tourist arrivals are associated with an expansion in private spending through the multiplier effect. To test this hypothesis, this study augments a simple consumption function with tourist arrivals and employs the dynamic OLS method to compute the short and long run relationships of the variables. Results suggest that while tourist arrivals have a positive correlation with household expenditure in the short run, it does not Granger cause household expenditure consumption.

Keywords: Tourism; Consumption; Barbados; Dynamic OLS (search for similar items in EconPapers)
JEL-codes: E2 L8 (search for similar items in EconPapers)
Date: 2010-02-08
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Citations: View citations in EconPapers (6)

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