Domestic and outbound tourism demand in Australia: a System-of-Equations Approach

George Athanasopoulos (), Minfeng Deng (), Gang Li () and Haiyan Song ()

No 6/13, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: This study uses a system-of-equations approach to model the substitution relationship between Australian domestic and outbound tourism demand. A new price variable based on relative ratios of purchasing power parity index is developed for the substitution analysis. Short-run demand elasticities are calculated based on the estimated dynamic almost ideal demand system. The empirical results reveal significant substitution relationships between Australian domestic tourism and outbound travel to Asia, the UK and the US. This study provides scientific support for necessary policy considerations to promote domestic tourism further.

Keywords: domestic tourism; substitution; almost ideal demand system; purchasing power parity; Australia (search for similar items in EconPapers)
Date: 2013
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