Panel smooth transition regression approach to analyzing tourism development – housing price nexus in G7 countries

Li Yang, Asadullah Khaskheli, Syed Raza and Nida Shah

International Journal of Housing Markets and Analysis, 2022, vol. 16, issue 1, 218-231

Abstract: Purpose - The purpose of this study is twofold: first is to examine the nonlinear relationship between tourism development and housing prices, and secondly, the role of economic growth in facilitating the materialization of tourism development and housing prices nexus in G7 countries. Design/methodology/approach - The authors used the newly introduced econometric technique panel smooth transition regression (PSTR) model with two regimes on annual panel data from 1995 to 2018. Findings - Results confirmed that the nexus between the tourism development and housing prices is nonlinear and regime dependent. Moreover, the results showed that the threshold level of economic growth above which tourism development increases the housing prices is 2.63%. The relationship above the threshold value is positive and growth enhancing, while below the threshold, tourism development has a negative effect on housing prices. The economic growth and housing prices also showed the U-shape relationship implying that at a certain level increase in economic growth decreases the housing prices but after a certain level increase in economic growth increases the housing prices. Originality/value - This paper makes a unique contribution to the literature with reference to developed economies, being a pioneering attempt to investigate the nonlinear relationship between tourism development and housing prices and applying more rigorous and advanced econometric techniques like PSTR.

Keywords: Tourism development; Housing prices; G7 countries; Developed economies; Nonlinear relationship; Panel smooth transition regression approach; Tourism; Developed countries; PSTR technique (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-12-2021-0138

DOI: 10.1108/IJHMA-12-2021-0138

Access Statistics for this article

International Journal of Housing Markets and Analysis is currently edited by Dr Richard Reed

More articles in International Journal of Housing Markets and Analysis from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().