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Bivariate VAR models to test Granger causality between tourist demand and supply: Implications for regional sustainable growth

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  • Bianca Biagi
  • Manuela Pulina

Abstract

The relationship between tourist demand and supply is investigated employing four time series models. To test for Granger causality a bivariate vector autoregression framework is used. Empirical results from each model are derived for the island of Sardinia (Italy) over the time span 1955 to 2004. The first model suggests supply is demand‐driven; the second model implies a bi‐directional Granger‐causal relationship between demand and capacity. The third and fourth models indicate demand is quality‐driven. This empirical finding implies that an environmental conservation policy may be feasible without compromising the number of tourists visiting Sardinia and hence its economic growth. Resumen Se investiga la relación entre la demanda y la oferta turística empleando cuatro modelos de series temporales. Para probar la causalidad de Granger se utilizó un marco de autorregresión vectorial bivariante. Los resultados empíricos de cada modelo se han obtenido para la isla de Cerdeña (Italia) durante el periodo 1955 a 2004. El primer modelo sugiere que la oferta está impulsada por la demanda; el segundo modelo implica una relación causal de Granger bidireccional entre la demanda y la capacidad. Los modelos tercero y cuarto indican que la demanda está motivada por la calidad. Este descubrimiento empírico implica que podría ser factible una política de conservación ambiental sin comprometer el número de turistas que visiten Cerdeña y por tanto su crecimiento económico.

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  • Bianca Biagi & Manuela Pulina, 2009. "Bivariate VAR models to test Granger causality between tourist demand and supply: Implications for regional sustainable growth," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 231-244, March.
    • Handle: RePEc:bla:presci:v:88:y:2009:i:1:p:231-244
    DOI: 10.1111/j.1435-5957.2008.00176.x
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    8. Tiziana Cuccia & Calogero Guccio & Ilde Rizzo, 2013. "Does Unesco inscription affect the performance of tourism destinations? A regional perspective," ACEI Working Paper Series AWP-04-2013, Association for Cultural Economics International, revised Oct 2013.

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