Domestic and international visitor expenditure and growth in the Christchurch economy

Peter Fieger and John Rice

MPRA Paper from University Library of Munich, Germany

Abstract: The city of Christchurch is the main gateway to New Zealand’s South Island and attracts a significant number of tourists every year. In 2010 and 2011, significant damage to the city’s building stock and infrastructure occurred as a result of two successive earthquakes. Consequently, Christchurch’s tourist arrivals and associated tourist spending declined significantly. However, the rebuilding efforts since 2011 and the re-opening of tourist facilities and infrastructure have led to a steady increase in visitor arrivals and expenditure. This paper investigates whether tourism expenditure as well as the prevailing exchange rate influence local gross domestic product for the city of Christchurch. We separate domestic and international expenditure analysis into two different vector auto-regression models followed by causality analysis to determine the direction of relationships between these three variables. Our results show that increased domestic and international visitor spending is followed by a measurable and significant increase of local GDP. Exchange rates have a small but non-significant impact on international tourist spending. We conclude that stimulating tourism is an essential element to achieve substantial economic growth in Christchurch.

Keywords: Tourism economics; New Zealand tourism (search for similar items in EconPapers)
JEL-codes: L83 O1 O47 (search for similar items in EconPapers)
Date: 2016-11-01
New Economics Papers: this item is included in nep-tur
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