Pooling international tourism in Western Europe

Abstract

This paper examines potential improvements in measures of international travel demand elasticities by pooling cross sections and time series of travel receipts. International travel receipts for 18 European countries are pooled and estimates of elasticities with respect to income, exchange rates, relative prices, transport costs, and number of terrorism events are computed. Indexes are developed for the purpose of measuring and aggregating transport costs and terrorism. The results show that the responses to changes in these variables are significantly different across countries. When the countries are constrained to have the same elasticities, but the constants are allowed to be different, it is found that all variables affect tourism in the expected direction and are statistically significant.