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United Kingdom and United States Tourism Demand for Malaysia:A Cointegration Analysis

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  • Habibi, Fateh
  • Abdul Rahim, Khalid
  • Chin, Lee

Abstract

Tourism industry has been an important contributor to the Malaysia economy. In this paper we inspect variations in the long run demand for tourism from United Kingdom and United States to Malaysia. The demand for tourism has been explained by macroeconomic variables, including income in origin countries, tourism prices in Malaysia, and travel cost between the two countries. Annual data from 1972 to 2006 are used for the analysis. Augmented Dickey-Fuller and Johansen’s maximum likelihood tests are used to test for unit root and cointegration. An error correction model (ECM) are estimated to a explain United Kingdom and United States demand for tourism to Malaysia. The results show that the long run equilibrium exists among variables, and the United Kingdom and United States tourists seem to be highly sensitive to the price variable.

Suggested Citation

  • Habibi, Fateh & Abdul Rahim, Khalid & Chin, Lee, 2008. "United Kingdom and United States Tourism Demand for Malaysia:A Cointegration Analysis," MPRA Paper 13590, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13590
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    References listed on IDEAS

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    1. Kwabena A. Anaman & Rose Aminah Ismail, 2002. "Cross-Border Tourism From Brunei Darussalam To Eastern Malaysia: An Empirical Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 47(01), pages 65-87.
    2. Hooi Hooi Lean & Russell Smyth, 2008. "Are Malaysia's Tourism Markets Converging? Evidence from Univariate and Panel Unit Root Tests with Structural Breaks," Tourism Economics, , vol. 14(1), pages 97-112, March.
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    4. Nada Kulendran & Sarath Divisekera, 2007. "Measuring the Economic Impact of Australian Tourism Marketing Expenditure," Tourism Economics, , vol. 13(2), pages 261-274, June.
    5. Andrea Mervar & James E. Payne, 2007. "Analysis of Foreign Tourism Demand for Croatian Destinations: Long-Run Elasticity Estimates," Tourism Economics, , vol. 13(3), pages 407-420, September.
    6. Ramesh Durbarry, 2004. "Tourism and Economic Growth: The Case of Mauritius," Tourism Economics, , vol. 10(4), pages 389-401, December.
    7. Egon Smeral, 2007. "Research Note: World Tourism Forecasting – Keep It Quick, Simple and Dirty," Tourism Economics, , vol. 13(2), pages 309-317, June.
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    Cited by:

    1. Majid FESHARI & Ali AKBAR TAGHIPOUR & Mojtaba VALIBEIGI, 2016. "Tourism Demand And Tax Relationship In Islamic Regions," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 99-106, December.
    2. Majid FESHARI & Ali AKBAR TAGHIPOUR & Mojtaba VALIBEIGI, 2016. "Tourism Demand And Tax Relationship In Islamic Regions," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 99-106, December.

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    More about this item

    Keywords

    Tourism demand; cointegration analysis; Error Correction Model;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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