The Impact of Exchange Rate Volatility and Inflation on Average Tourist Expenditures: Empirical Evidence from Türkiye

Year 2026, Issue: 102, 115 - 131, 07.01.2026

İbrahim Halil Uçar , Gülümser Palta

https://izlik.org/JA35EZ53HF

Abstract

This study aims to empirically investigate the theoretical relationship between exchange rate, inflation and average tourist expenditure within the context of the Turkish economy. The causal relationship between the exchange rate, inflation and average tourist expenditure has been investigated by using the Toda-Yamamoto test. According to the findings of the Toda-Yamamoto test, a one-way causality at a 5% significance level from average tourist expenditure to inflation and bidirectional causality at a 1% significance level between the exchange rate and inflation have been identified. On the other hand, no causal relationship has been found between average tourist expenditure and the exchange rate. The co-integration, long and short-term relationships among the parametres have been analyzed by using the ARDL (4,0,0) bound testing model. The F-statistic value estimated by utilizing the ARDL (4,0,0) model had remained below the upper bound values determined by Pesaran et al. (2001) at the 1% and 5% significance levels. This result led to the acceptance of the null hypothesis, which states that there is no long-run co-integration relationship between the parametres. Consequently, it has been concluded that there is no significant co-integration relationship between average tourist expenditures and the exchange rate and inflation in the long term. The findings of the study indicate that changes in exchange rates and inflation have no statistically significant effect on average tourist expenditure.

Keywords

Inflation , exchange rate , average tourist expenditure , cointegration , ARDL model

Ethical Statement

During the writing process of the study “The Impact of Exchange Rate Volatility and Inflation on Average Tourist Expenditures: Empirical Evidence from Türkiye” scientific rules, ethical and citation rules were followed. No falsification was made on the collected data and this study was not sent to any other academic publication medium for evaluation.

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