War, terror, and the tourism market in Israel

Aliza Fleischer () and Steven Buccola

Applied Economics, 2002, vol. 34, issue 11, 1335-1343

Abstract: A supply and demand model of the Israeli hotel industry is developed, distinguishing between its domestic and foreign sectors. Model simulations are employed to examine the impacts of war and terrorist incidents on tourist activity and hotel revenues. Foreign demand for Israeli hotel stays is highly price-elastic and income-inelastic, and moderately sensitive to terrorist events. Domestic demand is price-inelastic, income-elastic, and terror-insensitive. In the wake of terror attacks, hotels' supply or minimum prices to Israeli tourists shift downward, reducing local market prices and encouraging more local tourism. However, the magnitude of these shifts is minor, and the local market thus provides little buffer for dropoffs in foreign tourism. By permitting excess capacity in such fashion, hotels respond rationally to the price inelasticity of local demand.

Date: 2002
References: View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840110099252 (text/html)
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:taf:applec:v:34:y:2002:i:11:p:1335-1343

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840110099252

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().