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An ARDL Bounds Test Approach to Modelling Tourist Expenditure in South Africa

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  • Andrea Saayman
  • Melville Saayman

Abstract

This research follows micro-economic theory, according to which demand for a product is influenced by price, substitute prices and income, to determine the sensitivity of inbound tourist expenditure in South Africa to changes in these variables. Tourist expenditure per person per day from different origins forms the dependent variable. Using quarterly time-series data from 2003 to 2010, this article models inbound tourist expenditure from key source markets for the country. Previous research based on arrivals finds that South Africa is a relatively price-insensitive destination. However, this research shows that this is not the case for all markets. It mostly confirms the income elasticity of South Africa as a destination.

Suggested Citation

  • Andrea Saayman & Melville Saayman, 2015. "An ARDL Bounds Test Approach to Modelling Tourist Expenditure in South Africa," Tourism Economics, , vol. 21(1), pages 49-66, February.
    • Handle: RePEc:sae:toueco:v:21:y:2015:i:1:p:49-66
    DOI: 10.5367/te.2014.0436
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    References listed on IDEAS

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    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Elisabeth Kastenholz, 2005. "Analysing Determinants of Visitor Spending for the Rural Tourist Market in North Portugal," Tourism Economics, , vol. 11(4), pages 555-569, December.
    3. Haiyan Song & Gang Li & Stephen F. Witt & Baogang Fei, 2010. "Tourism Demand Modelling and Forecasting: How Should Demand Be Measured?," Tourism Economics, , vol. 16(1), pages 63-81, March.
    4. Willem A. Naudé & Andrea Saayman, 2005. "Determinants of Tourist Arrivals in Africa: A Panel Data Regression Analysis," Tourism Economics, , vol. 11(3), pages 365-391, September.
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    Cited by:

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    6. Umit Bulut & Emrah Kocak & Courtney Suess, 2020. "The effect of freedom on international tourism demand: Empirical evidence from the top eight most visited countries," Tourism Economics, , vol. 26(8), pages 1358-1373, December.

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