Scandinavian Working Papers in Economics

CAFO Working Papers,
Linnaeus University, Centre for Labour Market Policy Research (CAFO), School of Business and Economics

No 2009:12: Estimating the Swedish and Norwegian international tourism demand using (ISUR) technique

A. Khalik Salman (), Leif Arnesson (), Anna Sörensson () and Ghazi Shukur ()
Additional contact information
A. Khalik Salman: Department of Social Sciences, Mid Sweden University, Postal: MID SWEDEN UNIVERSITY, Department of Social Sciences, SE 831 25 ÖSTERSUND,
Leif Arnesson: Department of Social Sciences, Mid Sweden University, Postal: MID SWEDEN UNIVERSITY, Department of Social Sciences, SE 831 25 ÖSTERSUND,
Anna Sörensson: Department of Social Sciences, Mid Sweden University, Postal: MID SWEDEN UNIVERSITY, Department of Social Sciences, SE 831 25 ÖSTERSUND,
Ghazi Shukur: Centre for Labour Market Policy Research (CAFO), Postal: Centre for Labour Market Policy Research (CAFO), Dept of Economics and Statistics, School of Management and Economics, Växjö University , SE 351 95 Växjö, Sweden

Abstract: This paper estimates the demand for tourism to Sweden and Norway for five countries: Denmark, the United Kingdom, Switzerland, Japan, and the United States. For each visiting country, and for Sweden and Norway, we specify separate equations by including relative information. We then estimate these equations using Zellner’s Iterative Seemingly Unrelated Regressions (ISUR). The benefit of this model is that the ISUR estimators utilize the information present in the error correlation of the cross regressions (or equations) and hence are more efficient than single equation estimation methods such as ordinary least squares. Monthly time series data from 1993:01 to 2006:12 are used. The results show that the consumer price index, some lagged dependent variables, and several monthly dummies(representing seasonal effects) have a significant impact on the number of visitors to the SW6 region in Sweden and Tröndelag in Norway. We also find that, in at least some cases, relative prices and exchange rates have a significant effect on international tourism demand.

Keywords: Tourism demand; Significant factors; Iterative Seemingly Unrelated Regressions (ISUR)

JEL-codes: C32

45 pages, May 12, 2009

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