House prices and tourism development in Cyprus: A contemporary perspective

Andrew Alola, Simplice Asongu and Uju Alola ()
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Uju Alola: Istanbul Gelisim University, Turkey

No 19/067, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: This study investigates the nexus between tourism development and house prices in the Republic of Cyprus over the period spanning from 2005Q1 to 2016Q4. Tourism indicators vis-à-vis tourism arrivals along with other explanatory variables (domestic credit, land area per person, and the consumer price index) are employed in a multivariate Autoregressive Distributed Lag (ARDL)-bound test model. The empirical results indicate a significant evidence of cointegration. Indicatively, an observed adjustment of about 44% from short-run to long-run implies that the model is not relatively slow to adjust to disequilibrium. Importantly, a percent increase in tourism arrivals is observed to cause a rise in house price by about 37%. Expectedly, it is statistically observed that as the land area per person decreases, it is accompanied by a hike in house price. Also, the impacts of domestic credit offered to private enterprises and the consumer price index are different from the results in previous studies. As a policy guide, the government of Cyprus and stakeholders in the tourism and housing sectors should outline a strategy that will ensure the social welfare of people such that housing availability is not hampered by tourism activities.

Keywords: C22; O50; R31 (search for similar items in EconPapers)
Pages: 30
Date: 2019-01
New Economics Papers: this item is included in nep-tur and nep-ure
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Citations: View citations in EconPapers (1)

Forthcoming: Journal of Public Affairs

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http://www.afridev.org/RePEc/agd/agd-wpaper/House- ... opment-in-Cyprus.pdf Revised version, 2019 (application/pdf)

Related works:
Working Paper: House prices and tourism development in Cyprus: A contemporary perspective (2019)
Working Paper: House prices and tourism development in Cyprus: A contemporary perspective (2019)
Working Paper: House prices and tourism development in Cyprus: A contemporary perspective (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:agd:wpaper:19/067

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