Estimating the Impact of Avian Flu on International Tourism Demand Using Panel Data

Abstract

This paper investigates the impacts of Avian Flu on global and Asian tourism using panel data procedures. Both static and dynamic fixed effects panel data models are adopted to estimate the impacts of this infectious disease. The empirical results from static and dynamic fixed effects panel data models are consistent and indicate that the numbers of affected poultry outbreaks have significant impacts on international tourism of global and Asian affected countries. The high mortality rate among humans, the potential of a global flu pandemic, and some media frenzy with hype and speculation might adversely affect the images of these infected destinations as a safe tourist destination. Moreover, it is found that the average damage to Asian tourism was more serious, which might be induced by an ineffective suppression in numerous Asian infected countries. In addition, Asia was the earliest affected region, and the area infected most seriously by Avian Flu, both in humans and in poultry. Since the potential risks and damage arising from Avian Flu and the subsequent pandemic influenza is much greater than for previous diseases, the need to take necessary precautions in the event of an outbreak of Avian Flu and pandemic influenza warrants further attention and action in modeling and managing international tourism demand and risk.