Time-Variation in the Persistence of Tourism Uncertainty: The Role of Decomposed Oil Shocks

Onur Polat (), Rangan Gupta (), Oguzhan Cepni and Elie Bouri ()
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Onur Polat: Institute of Informatics, Hacettepe University, Beytepe Campus, 06800 Çankaya, Ankara, Turkiye
Rangan Gupta: Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa
Elie Bouri: School of Business, Lebanese American University, Lebanon

No 202623, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper analyzes the time-varying persistence of tourism uncertainty and its macroeconomic drivers. The local Whittle estimator is employed on the monthly Tourism Uncertainty Index (TUI) for 43 economies and two global aggregates from November 2002 to February 2025. The results show that tourism uncertainty in most countries exhibits long-memory and mean-reverting features. Rolling estimates reveal a significant upward trend in persistence, with a positive and significant linear trend for 36 of the 43 countries, while only three show a downward trend. To connect the rising persistence to some underlying factors, we use local projections of the growth rate of the time-varying persistence parameter based on structural oil-market shocks, controlling for global economic conditions and supply-chain pressure. Our results indicate that positive shocks to global economic activity, oil-consumption demand, and oil-inventory demand increase persistence, whereas positive oil-supply shocks, corresponding to expanded production and lower crude prices, decrease persistence. Overall, the findings suggest that tourism uncertainty has become structurally more persistent and largely influenced by demand and supply dynamics in the oil market.

Keywords: tourism uncertainty; long memory; fractional integration; local projections; oil-market shocks; time-varying persistence (search for similar items in EconPapers)
JEL-codes: C22 L83 Q43 Z30 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2026-09
New Economics Papers: this item is included in nep-tur
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