United Kingdom and United States Tourism Demand for Malaysia:A Cointegration Analysis

Fateh Habibi, Khalid Abdul Rahim and Chin Lee ()

MPRA Paper from University Library of Munich, Germany

Abstract: Tourism industry has been an important contributor to the Malaysia economy. In this paper we inspect variations in the long run demand for tourism from United Kingdom and United States to Malaysia. The demand for tourism has been explained by macroeconomic variables, including income in origin countries, tourism prices in Malaysia, and travel cost between the two countries. Annual data from 1972 to 2006 are used for the analysis. Augmented Dickey-Fuller and Johansen’s maximum likelihood tests are used to test for unit root and cointegration. An error correction model (ECM) are estimated to a explain United Kingdom and United States demand for tourism to Malaysia. The results show that the long run equilibrium exists among variables, and the United Kingdom and United States tourists seem to be highly sensitive to the price variable.

Keywords: Tourism demand; cointegration analysis; Error Correction Model (search for similar items in EconPapers)
JEL-codes: C22 L83 (search for similar items in EconPapers)
Date: 2008-11-20
New Economics Papers: this item is included in nep-sea and nep-tur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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