Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism

Serhan Cevik

Review of Economics, 2024, vol. 75, issue 1, 21-41

Abstract: This paper uses an augmented gravity model framework to investigate the historical impact of infectious diseases on international tourism and develops an out-of-sample prediction model. Using bilateral tourism flows among 38,184 pairs of countries during the period 1995–2017, I compare the forecasting performance of alternative specifications and estimation methods. These computations confirm the statistical and economic significance of infectious-disease episodes in forecasting international tourism flows. Including infectious diseases in the model brings a significant improvement in forecast accuracy relative to the standard gravity model. The magnitude of these effects, however, is likely to be much greater in the case of COVID-19, which is a highly contagious virus that has spread fast throughout populations across the world.

Keywords: infectious diseases; tourism flows; gravity model; predictability; out-of-sample forecasting (search for similar items in EconPapers)
JEL-codes: C21 C23 F10 F11 F14 F47 R12 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism (2023)
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DOI: 10.1515/roe-2023-0110

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