An econometric analysis of tourism inflow in Curaçao: can Tourism Price Indices help us out
At the first Conference of the International Association for Tourism Economics (Mallorca, October 25-27, 2007) the following paper was presented by Ernest Berkhout. Besides the abstract, the full paper can be downloaded via the link below.
In theory, prices are an important factor in explaining tourism demand. Empirically however, the role of price is not so evident, due to the use of very different and often theoretically inappropriate definitions. As expenditure patterns of tourists and local consumers are very different, this paper wants to analyse if our TPI is a better performing tool in empirical research than the commonly used CPI. The (preliminary) results show that theoretical superiority is not reflected in empirical results: statistical improvements are present but only very marginally. This might partially be due to insufficient distinctive power of our TPI, but it is just as probable that at the moment of decision making local prices are just not so important after all.