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Media type:
E-Article
Title:
Research Note:Estimating Price and Income Demand Elasticities for Spain Separately by the Major Source Markets
Contributor:
Álvarez-Diaz, Marcos;
González-Gómez, Manuel;
Otero-Giráldez, Maria Soledad
Published:
SAGE Publications, 2015
Published in:
Tourism Economics, 21 (2015) 5, Seite 1103-1110
Language:
English
DOI:
10.5367/te.2014.0396
ISSN:
2044-0375;
1354-8166
Origination:
Footnote:
Description:
The main goal of this study is to estimate the price and income elasticity of demand for tourism to Spain. This estimation is done separately for the major international source markets for Spain: Germany, the UK, Italy and the Netherlands. For this purpose, the authors use the autoregressive distributed lag (ARDL) approach to cointegration and the bootstrap method to construct empirical confidence intervals for each estimate. The results reveal that the tourism demand in all the countries studied has a similar income elasticity, which is approximately unitary. However, there is an important difference with regard to price elasticity: tourism demand from the UK is statistically price inelastic, but demand is elastic for the remaining countries. This finding is relevant because, first, it underlines the importance of studying the source markets separately instead of analysing an aggregate international tourism demand, and, second, it supports the need to implement different tourism policies and strategies with respect to the pricing decisions for each source market.