Risk Management of Daily Tourist Tax Revenues for the Maldives

Michael McAleer, Riaz Shareef and Bernardo da Veiga
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Riaz Shareef: University of Western Australia

No 2005.137, Working Papers from Fondazione Eni Enrico Mattei

Abstract: International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals which, in turn, determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies entirely on tourism for its economic and social development. As these receipts from international tourism are significant financial assets to the economies of SITEs, the time-varying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. In this paper, the volatility in the levels and growth rates of daily international tourist arrivals is investigated.

Keywords: Small Island Tourism Economies (SITEs); International tourist arrivals; Tourism tax; Volatility; Risk; Value-at-Risk (VaR); Sustainable Tourism-@-Risk (ST@R) (search for similar items in EconPapers)
JEL-codes: C32 D81 G18 L83 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-fin, nep-rmg and nep-tur
References: View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Risk Management of Daily Tourist Tax Revenues for the Maldives (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2005.137

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