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The Oil Price Collapse and the Birth of a Tourist Nation

Author

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  • Xie, Jinghua

    (University of Stavanger)

  • Tveterås , Sigbjorn

    (University of Stavanger)

Abstract

In this paper, we have estimated hotel revenue functions at the regional level in Norway. The purpose is to investigate the effects of the oil price collapse on tourism demand. The oil industry is a dominant economic sector in Norway. Its high demand for economic resources has inflated the general price level nationally. A side effect is that the Norwegian tourism industry has struggled with poor price competitiveness. We find the downfall in oil revenues caused by the fall in crude oil prices has boosted tourism growth through a weakening of the local currency, Norwegian kroner. This result suggests that a subset of rich countries where wealth inflate prices of tourism services can have problem in developing its tourism industry.

Suggested Citation

  • Xie, Jinghua & Tveterås , Sigbjorn, 2018. "The Oil Price Collapse and the Birth of a Tourist Nation," UiS Working Papers in Economics and Finance 2018/3, University of Stavanger.
    • Handle: RePEc:hhs:stavef:2018_003
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Oil price; tourism; exchange rate; price competitiveness; Norway;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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