Abstract
REX is the most commonly used proxy for prices in tourism demand models. Empirically, however, the REX has often failed to perform satisfactorily as a proxy for prices.Using a fairly large sample of 47 countries over 18 years, this paper develops an alternative proxy for prices in the form of a price competitiveness index using published GDP per capita PPP data from the World Bank. The advantage of this price proxy is that, it can be used to monitor the inter-temporal competitiveness of a destination. A model of outbound tourism is developed using the dynamic panel data technique. The estimation results show that while real exchange rate is statistically insignificant and yields a price elasticity of -0.004, the competitiveness index is significant and generates a price elasticity of -0.913. In both theory and practice, the index developed in this paper clearly outperforms real exchange rates as the preferred price variable in modelling outbound demand.
Original language | English |
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Title of host publication | CAUTHE 2014 Tourism and Hospitality in the Contemporary World |
Subtitle of host publication | Trends, Changes and Complexity |
Pages | 1100-1104 |
Number of pages | 5 |
Publication status | Published - 2014 |
Externally published | Yes |
Event | The Council for Australasian Tourism and Hospitality Education: Tourism and Hospitality in the Contemporary World: Trends, Changes and Complexity - The University of Queensland, Brisbane, Australia Duration: 10 Feb 2014 → 13 Feb 2014 http://cauthe.org/services/conferences/conference-2014/ (Link to Conference Details) |
Conference
Conference | The Council for Australasian Tourism and Hospitality Education |
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Abbreviated title | CAUTHE 2014 |
Country/Territory | Australia |
City | Brisbane |
Period | 10/02/14 → 13/02/14 |
Internet address |
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