Modelling tourism demand for South Africa: an almost ideal demand system approach
Loading...
Date
Authors
Botha, Andre
Saayman, Andrea
Journal Title
Journal ISSN
Volume Title
Publisher
University of Johannesburg. Department of Finance and Investment Management
Abstract
This paper models tourism demand for South Africa from the UK and the USA, using an almost ideal demand system. An error-correction almost ideal demand system (EC-AIDS) is applied to quantify the responsiveness of UK and USA tourism demand for South Africa, relative to changes in tourism prices and expenditure or income. Short-term own-price, cross-price and expenditure elasticities are derived from the EC-AIDS models. One of the key findings of the paper is that tourism from the UK and USA is not sensitive to price changes in South Africa in the short term. Tourism to South Africa is found to be more income-elastic than price-elastic, indicating that the country is vulnerable to changing world economic conditions. Even though price competitiveness does not yet seem to be a key concern, significant substitution effects are present, with especially Spain and Malaysia benefiting from a decline in South Africa’s price competitiveness
Description
Citation
Botha, A.P. & Saayman, A. 2013. Modelling tourism demand for South Africa: an almost ideal demand system approach. Journal of economic and financial sciences, 6(3):683-706. [http://www.uj.ac.za/faculties/fefs/Pages/JEF.aspx]