PANEL COINTEGRATION ANALYSIS OF INTERNATIONAL TOURISM DEMAND: SAMPLE OF ANTALYA

Abstract

This paper aimed to find the short-run and long-run relationships between international tourism demand to Antalya with economic variables such as income (GDP) and tourism price. Seasonally adjusted quarterly tourist arrivals data were used for 36 countries over the period 1996Q1 – 2014Q4. Firstly, panel unit root test such as Levin, Lin and Chu (LLC) (2002) panel unit root test, Maddala and Wu (1999) and Choi (2001) panel unit root test were used. Then the panel cointegration test based on Kao (1999) panel cointegration test and Pedroni (1999) panel cointegration test were used to test cointegration relationship among the variables in the long-run. Also we used a new technique of estimating dynamic heterogeneous panels, which is developed by Pesaran, Shin and Smith (1999), for the international tourism demand model. Pooled Mean Group (PMG) estimator is particularly convenient for panels with large T and N. The PMG estimator allows the intercepts, short-run coefficients and error variances to differ across groups while constrains the long run coefficients to be identical. The long-run results of this study show that growth in income (GDP) of the countries concerned has positive effect on international visitor arrivals to Antalya. However, tourism price was not found as determinants of international tourism demand in Antalya since the tourism price parameter is not statistically significant. Also error correction coefficient is negative and statistically significant. This findings show an existence of long-run relationship

Keywords

• Panel cointegration analysis, Pooled Mean Group Estimator, Antalya, international

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