Tourism industry: Role of the real effective exchange rate
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| Natura: | Artículo científico |
| Lingua: | en |
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Universidade do Algarve
2014
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| _version_ | 1876440331405230080 |
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| author | Gancho Todorov Ganchev |
| author_facet | Gancho Todorov Ganchev |
| contents | Tourism industry: Role of the real effective exchange rate Gancho Todorov Ganchev Estudios de Turismo Bulgaria tourism sector partial equilibrium supply and demand curves Real effective exchange rate This paper aims to evaluate an econometric model of equilibrium for the Bulgarian foreign tourism industry. The main microeconomic assumptions of the model are the existence of identical consumers, identical composite tourism industry product and perfect market conditions. The real effective exchange rate (REER) is used as a proxy for the composite product price and other proxies are introduced for foreign income and domestic tourism industry capacity. The data is deseasonalised with a geometric mean and the Hodrick-Prescott filter. The TSLS method of estimation is applied to take into account the over-identified model. The estimation results are consistent with core microeconomic theory. The estimated model allows for price equilibrium convergence. Dropping the initial constraints allows for additional conclusions. The tourism industry can substantially gain from advertising, product diversification and diminished reliance on summer bookings. Given the important macroeconomic role of the tourism industry under the Currency Board regime and the potential for tourism industry vulnerability, the government could play an important role in promoting sustainable development in the tourism sector. 2014 artículo científico 2182-8458 https://www.redalyc.org/articulo.oa?id=388743880022 en http://www.redalyc.org/revista.oa?id=3887 Tourism & Management Studies application/pdf Universidade do Algarve Tourism & Management Studies (Portugal) Vol.10 |
| format | Artículo científico |
| id | redalyc_388743880022 |
| institution | Redalyc |
| language | en |
| publishDate | 2014 |
| publisher | Universidade do Algarve |
| spellingShingle | Tourism industry: Role of the real effective exchange rate Gancho Todorov Ganchev Estudios de Turismo Bulgaria tourism sector partial equilibrium supply and demand curves Real effective exchange rate Tourism industry: Role of the real effective exchange rate Gancho Todorov Ganchev Estudios de Turismo Bulgaria tourism sector partial equilibrium supply and demand curves Real effective exchange rate This paper aims to evaluate an econometric model of equilibrium for the Bulgarian foreign tourism industry. The main microeconomic assumptions of the model are the existence of identical consumers, identical composite tourism industry product and perfect market conditions. The real effective exchange rate (REER) is used as a proxy for the composite product price and other proxies are introduced for foreign income and domestic tourism industry capacity. The data is deseasonalised with a geometric mean and the Hodrick-Prescott filter. The TSLS method of estimation is applied to take into account the over-identified model. The estimation results are consistent with core microeconomic theory. The estimated model allows for price equilibrium convergence. Dropping the initial constraints allows for additional conclusions. The tourism industry can substantially gain from advertising, product diversification and diminished reliance on summer bookings. Given the important macroeconomic role of the tourism industry under the Currency Board regime and the potential for tourism industry vulnerability, the government could play an important role in promoting sustainable development in the tourism sector. 2014 artículo científico 2182-8458 https://www.redalyc.org/articulo.oa?id=388743880022 en http://www.redalyc.org/revista.oa?id=3887 Tourism & Management Studies application/pdf Universidade do Algarve Tourism & Management Studies (Portugal) Vol.10 |
| title | Tourism industry: Role of the real effective exchange rate |
| topic | Estudios de Turismo Bulgaria tourism sector partial equilibrium supply and demand curves Real effective exchange rate |
| url | https://www.redalyc.org/articulo.oa?id=388743880022 |