Does Climate Policy Uncertainty Affect Tourism Demand? Evidence from Time-Varying Causality Tests

Nicholas Apergis (napergis@unipi.gr), Konstantinos Gavriilidis (konstantinos.gavriilidis@stir.ac.uk) and Rangan Gupta
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Konstantinos Gavriilidis: Stirling Management School, University of Stirling, FK9 4LA, Stirling, UK

No 202186, Working Papers from University of Pretoria, Department of Economics

Abstract: This study examines whether climate policy uncertainty affects the propensity of people to travel. To do so, we employ the Climate Policy Uncertainty (CPU) index and US air travel data to eight regional overseas destinations for the period 2000-2019. Using time-varying causality tests to deal with the structural breaks that exist in the relationship between CPU and US air travel, we find that CPU is a major determinant of air-travel demand to all destinations examined. The results are robust when we control for macroeconomic factors, uncertainty and geopolitical risks. The findings have important implications for destination countries and tourism professionals.

Keywords: Climate policy uncertainty; CPU index; air travel destinations; US; structural breaks; time-varying causality test (search for similar items in EconPapers)
JEL-codes: C32 C51 L8 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2021-12
New Economics Papers: this item is included in nep-ene, nep-env, nep-tre, nep-tur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Does climate policy uncertainty affect tourism demand? Evidence from time-varying causality tests (2023)
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