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Determinants of international tourism demand: Evidence from Australian states and territories

Author

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  • Muhammad Shafiullah

    (University of Nottingham Malaysia, Malaysia)

  • Luke Emeka Okafor

    (University of Nottingham Malaysia, Malaysia)

  • Usman Khalid

    (University of Nottingham Malaysia, Malaysia)

Abstract

This article explores whether the determinants of international tourism demand differ by states and territories in Australia. This is the first attempt at econometric modelling of international tourism demand in the states and territories of Australia. A demand model is specified where international visits to states and territories is a function of world income, state-level transportation costs, stock of foreign-born residents, the Australian real exchange rate and the price levels of international and domestic substitutes. Panel and time series econometric techniques are employed to test the model variables for stationarity, cointegration and direction of causality. Panel and time series cointegration tests show that the model is cointegrated. The causality analysis indicates that all explanatory variables Granger cause international visits to the Australian states and territories. Further, we show that the impacts of the determinants of international tourism vary by states and territories. The results underscore the importance of targeted policymaking that takes into account the economic and social structure of each state and territory instead of designing tourism policies on the basis of one-size-fits-all approach.

Suggested Citation

  • Muhammad Shafiullah & Luke Emeka Okafor & Usman Khalid, 2019. "Determinants of international tourism demand: Evidence from Australian states and territories," Tourism Economics, , vol. 25(2), pages 274-296, March.
    • Handle: RePEc:sae:toueco:v:25:y:2019:i:2:p:274-296
    DOI: 10.1177/1354816618800642
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    4. Anappattath Muhammed Salim & Thomas Shiby M., 2023. "Demand for Kerala’s International Tourism by the Top Three Source Markets: A Comparative Analysis," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 11(1), pages 208-226, October.
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    7. Nyasha, Sheilla & Odhiambo, Nicholas M., 2021. "Determinants of Tourism Development: Empirical Evidence from Three Developing Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 74(3), pages 335-368.
    8. Wee Yeap Lau, 2020. "Bank Credit, Public Financial Incentives, Tax Financial Incentives and Export Performance During the Global Financial Crisis: A Review," Shanlax International Journal of Economics, Shanlax Journals, vol. 8(2), pages 1-4, March.
    9. S. Nyasha & N.M. Odhiambo, 2021. "Determinants of Tourism Development: Empirical Evidence from Three Developing Countries," Working Papers AESRI-2021-19, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    10. Khalid, Usman & Shafiullah, Muhammad, 2021. "Financial development and governance: A panel data analysis incorporating cross-sectional dependence," Economic Systems, Elsevier, vol. 45(2).
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