International travel to and from Brazil – Overseas tourism as a luxury good and a status symbol

Abstract

Using data for the period 1995Q1–2012Q4, single-equation error correction models for real tourism import demand to Brazil and real tourism export demand from Brazil are derived. According to breakpoint tests, two periods (pre-2003 and post-2003) have to be distinguished. While international travel to and from Brazil can be seen as a luxury good for the whole period, low economic growth rates at the global level and the real appreciation of the Brazilian currency “real” from 2003 onward have led to stagnating real tourism exports and decreases in long-term income and price elasticities. However, high economic growth rates in Brazil and the real appreciation from 2003 onward have led to strongly growing real tourism imports and increases in long-term income and price elasticities. In line with international travel being regarded as a status symbol in Brazil, a Veblen effect of conspicuous consumption can be confirmed for the post-2003 period.