AN ECONOMETRIC STUDY OF THE TOURIST INDUSTRY

Abstract

This study is motivated by the fact that although many studies have been done concerning the tourist industry, no econometric model has been constructed yet. As such, evaluations of issues facing the tourist industry had based themselves on I-O analysis. Moreover, econometric forecasting of various 'components' of the tourist industry was impossible. The purpose of this study is therefore to construct an econometric model for the demand of tourism and to use it to evaluate issues. A list of tests; namely, simulation, multiplier analysis and ex post forecasting was applied to ensure the credibility of the model. Ex ante forecasting of the endogenous variables was also done. Using the empirical findings and the forecasted results, the issues were systematically discussed and solutions were given. In addition, during the course of discussion, it was found that a number of issues; for example the tourist carrying capacity, have not been addressed by any previous studies. Hence some suggestions were given to facilitate future research works m these areas.