The linear almost ideal demand system (LAIDS), in both static and dynamic forms, is examined in the context of international tourism demand. The superiority of the dynamic error correction LAIDS compared to its static counterpart is demonstrated in terms of both the acceptability of theoretical restrictions and forecasting accuracy, using a data set on the expenditure of United Kingdom tourists in twenty-two Western European countries. Both long-run and short-run demand elasticites are calculated. The expenditure elasticities show that travelling to most major destinations in Western Europe appears to be a luxury for UK tourists in the long run. The demand for travel to these destinations by UK tourists is also likely to be more price elastic in the long run than in the short run. The calculated cross-price elasticites suggest that the substitution/complementarity effects vary from destination to destination.

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Modeling Tourism Demand: A Dynamic Linear AIDS Approach

How competitive is Hong Kong against its competitors? An econometric study

Economic Analysis of Tourism Consumption Dynamics: A Time-varying Parameter Demand System Approach

The dynamic system-of-equations approach has been used to analyze the demand for outbound tourism among a number of destinations. However, this approach has not been applied to the context of the tourist consumption of different products in a given destination. Given the importance of understanding tourists' consumption behavior to destination management, this study seeks to gain new insights into Hong Kong inbound tourist expenditure patterns using a dynamic system-of-equations approach: the almost ideal demand system model. Based on the estimation of a complete demand system, this study investigates the interactions among the demand for different tourism products (i.e., shopping, hotel accommodation, meals outside hotels, and other) and the impacts of price changes on demand. Tourists from different source markets are examined separately, and the results show that their consumption behavior differs significantly.

Analyzing Tourist Consumption: A Dynamic System-of-Equations Approach:

This paper examines the results of estimating and testing a system of demand equations for the UK using quarterly data for the period 1955–69. Variations in the results of other authors when testing demand restrictions are discussed. A number of test statistics are employed to test the symmetry restrictions, all of which lead to emphatic rejection. Possible explanations for conflict in the results of testing demand restrictions are examined.

The estimation and testing of a system of demand equations for the UK

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R. H. Court

Papers

An Application of Demand Theory to Projecting New Zealand Retail Consumption