Health Tourism Revenues and Real Exchange Rate Relationship in Türkiye

Abstract

ABSTRACT The international nature of health tourism, which has an increasing importance, makes its interaction with the real exchange rate a prominent research topic. On this basis, this study aims to examine the relationship between health tourism revenues and real exchange rate for Türkiye, and to determine to what extent the preferences of health tourists traveling to this country are price- or cost-centered. For this purpose, Johansen cointegration and Granger causality analyses and the dataset for the period Q1 2002 – Q4 2019 were used. Findings of cointegration analysis supported that there is a long-term relationship between real exchange rate and health tourism revenues. Accordingly, a 1% change in all, developed, and developing trading partner countries based real exchange rate causes a change of 2.4065%, 2.6108%, and 2.1383% in health tourism revenues in reverse direction, respectively. These findings indicate that health tourism revenues are highly sensitive to the changes in real exchange rates. Furthermore, Granger causality analysis supported a one-way causal relationship from all three real exchange rates to health tourism revenues. Considering the findings, it is possible to state despite the high quality of health services in Türkiye, prices or costs are significantly effective in the decisions of health tourists.