An Analysis of Thailand’s Long-run Tourism Demand
Abstract
This paper aims to estimate Thailand’s long-run tourism elasticity of demand by
applying dynamic ordinary least squares (DOLS) and long-run static model of time varying
parameter (TVP-LRM) is used to study the structural change of Thailand’s tourism demand
which may have been induced by the change in the exchange rate policy in 1997. The study
also analysis the difference demand elasticity between high and low tourist seasons, and the
difference in demand that developed from annual and monthly data during the same period are
compared. The results show that, there are a range of demand elasticity in each origin market.
However, the Thailand’s tourism is a luxury goods for the major markets and own price
elasticity is more than one, and lower than cross price elasticity. The change in the exchange
rate policy in 1997 caused changes in the structural tourism demand for most of the countries
except South Korea and U.S.A. Meanwhile, tourism seasonality and the use of higher
frequency data do not affect the size of the elasticity. This result reveals that price setting
strategy should be different in the different foreign tourist markets. Information about price
changes in other competitors need to be considered as the change in price of substitutes has more effect Thailand’s price. Moreover, the different price strategy in different tourism seasonality did not seen to be affective in create more tourism demand.
References
1. อัครพงศ์ อั้นทอง และปวีณา คาพุกกะ (2552) การพยากรณ์จานวนนักท่องเที่ยวต่างชาติที่เดินทางมาท่องเที่ยวในประเทศไทยโดยใช้แบบจาลอง SARIMA Intervention, วารสารวิชาการ มหาวิทยาลัยอุบลราชธานี, 11(1), หน้า 196-214.
2. อัครพงศ์ อั้นทอง และปวีณา คาพุกกะ (2553) การตรวจสอบลักษณะของข้อมูลอนุกรมเวลาสาหรับการพยากรณ์อุปสงค์การท่องเที่ยวในประเทศไทย, วารสารมนุษยศาสตร์และสังคม มหาวิทยาลัยอุบลราชธานี, 1(1), หน้า 61-86.
3. อัครพงศ์ อั้นทอง และมิ่งสรรพ์ ขาวสะอาด (2552) ความเป็นฤดูกาลของการท่องเที่ยวในจังหวัดเชียงใหม่, วารสารเศรษฐศาสตร์ มหาวิทยาลัยเกษตรศาสตร์, 16(2), หน้า 32-47.
4. Beaulieu, J.J. and Miron, J.A. (1993) Seasonal unit roots in aggregate U.S. data, Journal of Econometrics, 55(1-2), pp. 305-328.
5. Crouch, G.I. (1994) The study of international tourism demand: a review of findings, Journal of Travel Research, 33(1), pp. 41-54.
6. Dickey, D.A. and Fuller, W.A. (1979) Distribution of the estimators for autoregressive time series with a unit root, Journal of the American Statistical Association, 74(366), pp. 427-431.
7. Dwyer, L., Forsyth, P. and Rao, P. (2000) The price competitiveness of travel and tourism: A comparison of 19 destinations, Tourism Management, 21(1), pp. 9-22.
8. Engle R.F. and Granger, C.W.J. (1987) Co-integration and error correction: Representation, estimation, and testing, Econometrica, 55(2), pp. 251-276.
9. Fernandez-Morales, A. and Mayorga-Toledano, M.C. (2008) Seasonal concentration of the hotel demand in Costa del Sol: a decomposition by nationalities, Tourism Management, 29(5), pp. 940-949.
10. Franses, P.H. (1991) Seasonality, non-stationarity and the forecasting of monthly time series, International Journal of Forecasting, 7(2), pp. 199-208.
11. Franses, P.H. and Hobijn, B. (1997) Critical values for unit root tests in seasonal time series, Journal of Applied Statistics, 24(1), pp. 25-48.
12. Granger, C.W.J. and Newbold, P. (1974) Spurious regressions in econometrics, Journal of Econometrics, 2(2), pp. 111-120.
13. Habibi, F. and Rahim, K.A. (2009) A bound test approach to cointegration of tourism demand, American Journal of Economics and Business Administration, 1(2), pp. 165-172.
14. Hylleberg, S., Engle, R.F., Granger, C.W.J. and Yoo, B.S. (1990) Seasonal integration and cointegration, Journal of Econometrics, 44(1-2), pp. 215-238.
15. Ibrahim, M.H., Padli, J. and Baharom, A.H. (2009) Long-run relationships and dynamic interactions between housing and stock price in Thailand, Asia Academy of Management Journal of Accounting and Finance, 5(1), pp. 93-105.
16. Johansen, S. (1988) Statistical analysis of cointegrating vectors, Journal of Economic Dynamics and Control, 12(2/3), pp. 231-254.
17. Johansen, S. and Juselius, K. (1990) Maximum likelihood estimation and inference on cointegration –with applications to the demand for money, Oxford Bulletin of Economics and Statistics, 52(2), pp. 169-210.
18. Kao, C. (1999) Spurious regression and residual-based tests for cointegration in panel data, Journal of Econometrics, 90(1), pp. 1-44.
19. Kim, J.H. and Moosa, I.A. (2005) Forecasting international tourist flows to Australia: a comparison between the direct and indirect methods, Tourism Management, 26 (1), pp. 69-78.
20. Kim, S.S., Gou, Y. and Agrusa, J. (2005) Preference and positioning analyses of overseas destination by mainland Chinese outbound pleasure tourists, Journal of Travel Research, 44(2), pp. 212-220.
21. Koenig-Lewis, N. and Bischoff, E.E. (2004) Analyzing seasonality in Welsh room occupancy data, Annals of Tourism Research, 31(2), pp. 374-392.
22. Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. and Shin, Y. (1992) Testing the null hypothesis of stationarity against the alternative of a unit root, Journal of Econometrics, 54(1-3), pp. 159-178.
23. Li, G., Song, H. and Witt, S.F. (2005) Recent developments in econometric modeling and forecasting, Journal of Travel Research, 44(1), pp. 82-99.
24. Li, G., Song, H. and Witt, S.F. (2006) Time varying parameter and fixed parameter linear AIDS: an application to tourism demand forecasting, International Journal of Forecasting, 22(1), pp. 57-71.
25. Li, G., Wong, K.K.F., Song, H. and Witt, S.F. (2006) Tourism demand forecasting: a time varying parameter error correction model, Journal of Travel Research, 45(2), pp. 175-185.
26. Masih, R. and Masih, M.M. (1996) Stock-Watson dynamic OLS (DOLS) and error-correction modelling approaches to estimating long- and short-run elasticities in a demand function: New evidence and methodological implications from an application to the demand for coal in mainland China, Energy Economics, 18(4), pp. 315-334.
27. Narayan, P.K. (2004) Fiji’s tourism demand: the ARDL approach to cointegration, Tourism Economics, 10(2), pp. 193-206.
28. Narayan, P.K. and Narayan, S. (2005) Estimating income and price elasticities of imports for Fiji in a cointegration framework, Economic Modelling, 22(3), pp. 423-438.
29. Newey, W.K. and West, K.D. (1987) A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix, Econometrica, 55(3), pp. 703-708.
30. Panopoulou, E. and Pittis, N. (2004) A comparison of autoregressive distributed lag and dynamic OLS cointegration estimators in the case of a serially correlated cointegraion, The Econometrics Journal, 7(2), pp. 585-617.
31. Pesaran, M.H., Shin, Y. and Smith, R.J. (2001) Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16(3), pp. 289-326.
32. Phillips, P.C.B and Perron, P. (1988) Testing for a unit root in time series regression, Biometrika, 75(2), pp. 335-346
33. Phillips, P.C.B. and Hansen, B.E. (1990) Statistical inference in instrumental variable regression with I(1) processes, Review of Economic Studies, 57(1), pp. 99-125.
34. Phillips, P.C.B. and Loretan, M. (1991) Estimating long-run economic equilibria, Review of Economic Studies, 58(3), pp. 407-436.
35. Said, E. and Dickey, D.A. (1984) Testing for unit roots in autoregressive moving average models of unknown order, Biometrika, 71(3), pp. 599-607
36. Saikkonen, P. (1991) Asymptotically efficient estimation of cointegrating regressions, Econometric Theory, 7(1), pp. 1-21.
37. Song, H. and Li, G. (2008) Tourism demand modelling and forecasting–a review of recent research, Tourism Management, 29(2), pp. 203-220.
38. Song, H., Kim, J.H. and Yang, S. (2010) Confidence intervals for tourism demand elasticity, Annals of Tourism Research, 37(2), pp. 377-396.
39. Song, H., Witt, S.F. and Li, G. (2003) Modelling and forecasting the demand for Thai tourism, Tourism Economics, 9(4), pp. 363-387.
40. Stock, J.H. and Watson, M.W. (1993) A simple estimator of cointegrating vectors in higher order integrated systems, Econometrica, 61(4), pp. 783-820.
41. Syriopoulos, T.C. (1995) A dynamic of demand for Mediterranean tourism, International Review of Applied Economics, 9(3), pp. 318-336.
42. VanVoorshis, C.W. and Morgan, L.B. (2007) Understanding power and rules of thumb for determining sample sizes, Tutorials in Quantitative Methods for Psychology, 3(2), pp. 43-50.
43. Vogt, M.G. and Wittayakorn, C. (1998) Determinants of the demand for Thailand’s Exports of tourism, Applied Economics, 30(6), pp. 711-715
44. White, H. (1980) A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity, Econometrica, 48(4), pp. 817-838.
45. Banerjee, A., Dolado, J., Galbraith, J.W. and Hendry, D.F. (1993) Co-integration, Error-correction, and the Econometric Analysis of Non Stationary Data. (New York: Oxford University Press).
46. Enders, W. (2004) Applied Econometric Time Series, 2nd ed. (New York: John Wiley & Sons).
47. Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W. (1998) Multivariate Data Analysis, 5th ed. (London: Prentice-Hall International).
48. Johansen, S. (1995) Likelihood-Based Inference in Cointegrated Vector Autoregressive Models. (Oxford: Oxford University Press).
49. Lütkepohl, H. and Krätzing, M. (2004) Applied Time Series Econometrics. (Cambridge: Cambridge University Press).
50. Song, H. and Witt, F.S. (2000) Tourism Demand Modelling and Forecasting: Modern Econometric Approach. (Oxford: Pergamon).
51. Song, H., Witt, F.S. and Li, G. (2009) The Advanced Econometrics of Tourism Demand. (New York: Routledge).
52. Studenmund, A.H. (2006) Using Econometrics: A Practical Guide, 5th ed. (Boston: Pearson Education).
53. Habibullah, M.S. and Baharom, A.H. (2008) Crime and economic conditions in Malaysia: An ARDL bounds testing approach, MPRA Paper No. 11910, Munich Personal RePEc Archive.
54. Narayan, P.K. (2004) Reformulating critical values for the bounds F-statistics approach to cointegration: an application to the tourism demand model for Fiji. Discussion Papers No. 02/04, Department of Economics, Monash University.
55. Pesaran M.H. and Shin, Y. (1995) Autoregressive distributed lag modelling approach to cointegration analysis, DAE Working Paper Series No 9514, Department of Economics, University of Cambridge.
56. UNWTO (2010) UNWTO World Tourism Barometer, Volume 8, No 2, June 2010.
57. World Economic Forum (2009) The Travel & Tourism Competitiveness Report 2009-Managing in a Time of Turbulence. (Geneva: World Economics Forum).
58. WTTC. (2010) Travel & Tourism Economic Impact: Thailand 2009. (London: World Travel & Tourism Council).
59. Maeta Chumni (2001) Tourism Demand Model: Determinants of Thailand’s International Tourist Receipts, Mater Thesis. Faculty of Economics, Chulalongkorn University Bangkok.
2. อัครพงศ์ อั้นทอง และปวีณา คาพุกกะ (2553) การตรวจสอบลักษณะของข้อมูลอนุกรมเวลาสาหรับการพยากรณ์อุปสงค์การท่องเที่ยวในประเทศไทย, วารสารมนุษยศาสตร์และสังคม มหาวิทยาลัยอุบลราชธานี, 1(1), หน้า 61-86.
3. อัครพงศ์ อั้นทอง และมิ่งสรรพ์ ขาวสะอาด (2552) ความเป็นฤดูกาลของการท่องเที่ยวในจังหวัดเชียงใหม่, วารสารเศรษฐศาสตร์ มหาวิทยาลัยเกษตรศาสตร์, 16(2), หน้า 32-47.
4. Beaulieu, J.J. and Miron, J.A. (1993) Seasonal unit roots in aggregate U.S. data, Journal of Econometrics, 55(1-2), pp. 305-328.
5. Crouch, G.I. (1994) The study of international tourism demand: a review of findings, Journal of Travel Research, 33(1), pp. 41-54.
6. Dickey, D.A. and Fuller, W.A. (1979) Distribution of the estimators for autoregressive time series with a unit root, Journal of the American Statistical Association, 74(366), pp. 427-431.
7. Dwyer, L., Forsyth, P. and Rao, P. (2000) The price competitiveness of travel and tourism: A comparison of 19 destinations, Tourism Management, 21(1), pp. 9-22.
8. Engle R.F. and Granger, C.W.J. (1987) Co-integration and error correction: Representation, estimation, and testing, Econometrica, 55(2), pp. 251-276.
9. Fernandez-Morales, A. and Mayorga-Toledano, M.C. (2008) Seasonal concentration of the hotel demand in Costa del Sol: a decomposition by nationalities, Tourism Management, 29(5), pp. 940-949.
10. Franses, P.H. (1991) Seasonality, non-stationarity and the forecasting of monthly time series, International Journal of Forecasting, 7(2), pp. 199-208.
11. Franses, P.H. and Hobijn, B. (1997) Critical values for unit root tests in seasonal time series, Journal of Applied Statistics, 24(1), pp. 25-48.
12. Granger, C.W.J. and Newbold, P. (1974) Spurious regressions in econometrics, Journal of Econometrics, 2(2), pp. 111-120.
13. Habibi, F. and Rahim, K.A. (2009) A bound test approach to cointegration of tourism demand, American Journal of Economics and Business Administration, 1(2), pp. 165-172.
14. Hylleberg, S., Engle, R.F., Granger, C.W.J. and Yoo, B.S. (1990) Seasonal integration and cointegration, Journal of Econometrics, 44(1-2), pp. 215-238.
15. Ibrahim, M.H., Padli, J. and Baharom, A.H. (2009) Long-run relationships and dynamic interactions between housing and stock price in Thailand, Asia Academy of Management Journal of Accounting and Finance, 5(1), pp. 93-105.
16. Johansen, S. (1988) Statistical analysis of cointegrating vectors, Journal of Economic Dynamics and Control, 12(2/3), pp. 231-254.
17. Johansen, S. and Juselius, K. (1990) Maximum likelihood estimation and inference on cointegration –with applications to the demand for money, Oxford Bulletin of Economics and Statistics, 52(2), pp. 169-210.
18. Kao, C. (1999) Spurious regression and residual-based tests for cointegration in panel data, Journal of Econometrics, 90(1), pp. 1-44.
19. Kim, J.H. and Moosa, I.A. (2005) Forecasting international tourist flows to Australia: a comparison between the direct and indirect methods, Tourism Management, 26 (1), pp. 69-78.
20. Kim, S.S., Gou, Y. and Agrusa, J. (2005) Preference and positioning analyses of overseas destination by mainland Chinese outbound pleasure tourists, Journal of Travel Research, 44(2), pp. 212-220.
21. Koenig-Lewis, N. and Bischoff, E.E. (2004) Analyzing seasonality in Welsh room occupancy data, Annals of Tourism Research, 31(2), pp. 374-392.
22. Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. and Shin, Y. (1992) Testing the null hypothesis of stationarity against the alternative of a unit root, Journal of Econometrics, 54(1-3), pp. 159-178.
23. Li, G., Song, H. and Witt, S.F. (2005) Recent developments in econometric modeling and forecasting, Journal of Travel Research, 44(1), pp. 82-99.
24. Li, G., Song, H. and Witt, S.F. (2006) Time varying parameter and fixed parameter linear AIDS: an application to tourism demand forecasting, International Journal of Forecasting, 22(1), pp. 57-71.
25. Li, G., Wong, K.K.F., Song, H. and Witt, S.F. (2006) Tourism demand forecasting: a time varying parameter error correction model, Journal of Travel Research, 45(2), pp. 175-185.
26. Masih, R. and Masih, M.M. (1996) Stock-Watson dynamic OLS (DOLS) and error-correction modelling approaches to estimating long- and short-run elasticities in a demand function: New evidence and methodological implications from an application to the demand for coal in mainland China, Energy Economics, 18(4), pp. 315-334.
27. Narayan, P.K. (2004) Fiji’s tourism demand: the ARDL approach to cointegration, Tourism Economics, 10(2), pp. 193-206.
28. Narayan, P.K. and Narayan, S. (2005) Estimating income and price elasticities of imports for Fiji in a cointegration framework, Economic Modelling, 22(3), pp. 423-438.
29. Newey, W.K. and West, K.D. (1987) A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix, Econometrica, 55(3), pp. 703-708.
30. Panopoulou, E. and Pittis, N. (2004) A comparison of autoregressive distributed lag and dynamic OLS cointegration estimators in the case of a serially correlated cointegraion, The Econometrics Journal, 7(2), pp. 585-617.
31. Pesaran, M.H., Shin, Y. and Smith, R.J. (2001) Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16(3), pp. 289-326.
32. Phillips, P.C.B and Perron, P. (1988) Testing for a unit root in time series regression, Biometrika, 75(2), pp. 335-346
33. Phillips, P.C.B. and Hansen, B.E. (1990) Statistical inference in instrumental variable regression with I(1) processes, Review of Economic Studies, 57(1), pp. 99-125.
34. Phillips, P.C.B. and Loretan, M. (1991) Estimating long-run economic equilibria, Review of Economic Studies, 58(3), pp. 407-436.
35. Said, E. and Dickey, D.A. (1984) Testing for unit roots in autoregressive moving average models of unknown order, Biometrika, 71(3), pp. 599-607
36. Saikkonen, P. (1991) Asymptotically efficient estimation of cointegrating regressions, Econometric Theory, 7(1), pp. 1-21.
37. Song, H. and Li, G. (2008) Tourism demand modelling and forecasting–a review of recent research, Tourism Management, 29(2), pp. 203-220.
38. Song, H., Kim, J.H. and Yang, S. (2010) Confidence intervals for tourism demand elasticity, Annals of Tourism Research, 37(2), pp. 377-396.
39. Song, H., Witt, S.F. and Li, G. (2003) Modelling and forecasting the demand for Thai tourism, Tourism Economics, 9(4), pp. 363-387.
40. Stock, J.H. and Watson, M.W. (1993) A simple estimator of cointegrating vectors in higher order integrated systems, Econometrica, 61(4), pp. 783-820.
41. Syriopoulos, T.C. (1995) A dynamic of demand for Mediterranean tourism, International Review of Applied Economics, 9(3), pp. 318-336.
42. VanVoorshis, C.W. and Morgan, L.B. (2007) Understanding power and rules of thumb for determining sample sizes, Tutorials in Quantitative Methods for Psychology, 3(2), pp. 43-50.
43. Vogt, M.G. and Wittayakorn, C. (1998) Determinants of the demand for Thailand’s Exports of tourism, Applied Economics, 30(6), pp. 711-715
44. White, H. (1980) A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity, Econometrica, 48(4), pp. 817-838.
45. Banerjee, A., Dolado, J., Galbraith, J.W. and Hendry, D.F. (1993) Co-integration, Error-correction, and the Econometric Analysis of Non Stationary Data. (New York: Oxford University Press).
46. Enders, W. (2004) Applied Econometric Time Series, 2nd ed. (New York: John Wiley & Sons).
47. Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W. (1998) Multivariate Data Analysis, 5th ed. (London: Prentice-Hall International).
48. Johansen, S. (1995) Likelihood-Based Inference in Cointegrated Vector Autoregressive Models. (Oxford: Oxford University Press).
49. Lütkepohl, H. and Krätzing, M. (2004) Applied Time Series Econometrics. (Cambridge: Cambridge University Press).
50. Song, H. and Witt, F.S. (2000) Tourism Demand Modelling and Forecasting: Modern Econometric Approach. (Oxford: Pergamon).
51. Song, H., Witt, F.S. and Li, G. (2009) The Advanced Econometrics of Tourism Demand. (New York: Routledge).
52. Studenmund, A.H. (2006) Using Econometrics: A Practical Guide, 5th ed. (Boston: Pearson Education).
53. Habibullah, M.S. and Baharom, A.H. (2008) Crime and economic conditions in Malaysia: An ARDL bounds testing approach, MPRA Paper No. 11910, Munich Personal RePEc Archive.
54. Narayan, P.K. (2004) Reformulating critical values for the bounds F-statistics approach to cointegration: an application to the tourism demand model for Fiji. Discussion Papers No. 02/04, Department of Economics, Monash University.
55. Pesaran M.H. and Shin, Y. (1995) Autoregressive distributed lag modelling approach to cointegration analysis, DAE Working Paper Series No 9514, Department of Economics, University of Cambridge.
56. UNWTO (2010) UNWTO World Tourism Barometer, Volume 8, No 2, June 2010.
57. World Economic Forum (2009) The Travel & Tourism Competitiveness Report 2009-Managing in a Time of Turbulence. (Geneva: World Economics Forum).
58. WTTC. (2010) Travel & Tourism Economic Impact: Thailand 2009. (London: World Travel & Tourism Council).
59. Maeta Chumni (2001) Tourism Demand Model: Determinants of Thailand’s International Tourist Receipts, Mater Thesis. Faculty of Economics, Chulalongkorn University Bangkok.
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2018-07-31
How to Cite
อั้นทอง อ., & ขาวสอาด ม. (2018). An Analysis of Thailand’s Long-run Tourism Demand. Thailand and The World Economy, 29(2), 1–34. Retrieved from https://so05.tci-thaijo.org/index.php/TER/article/view/137406
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