Modeling tourism demand: A dynamic linear AIDS approach

Gang Li, Haiyan Song, Stephen F. Witt

Research output: Journal article publicationJournal articleAcademic researchpeer-review

89 Citations (Scopus)

Abstract

The linear almost ideal demand system (LAIDS), in both static and dynamic forms, is examined in the context of international tourism demand. The superiority of the dynamic error correction LAIDS compared to its static counterpart is demonstrated in terms of both the acceptability of theoretical restrictions and forecasting accuracy, using a data set on the expenditure of U.K. tourists in 22 Western European countries. Both long-run and short-run demand elasticities are calculated. The expenditure elasticities show that traveling to most major destinations in Western Europe appears to be a luxury for U.K. tourists in the long run. The demand for travel to these destinations by U.K. tourists is also likely to be more price elastic in the long run than in the short run. The calculated cross-price elasticities suggest that the substitution/complementarity effects vary from destination to destination.
Original languageEnglish
Pages (from-to)141-150
Number of pages10
JournalJournal of Travel Research
Volume43
Issue number2
DOIs
Publication statusPublished - 1 Jan 2004

Keywords

  • Demand elasticity
  • Error correction
  • Forecasting
  • Linear almost ideal demand system (LAIDS)
  • Tourism demand

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Transportation
  • Tourism, Leisure and Hospitality Management

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