Tourism Earnings Instability in Singapore, 1972‐88

Abstract

Investigates the time series relationship between export earnings instability and instability in receipts from international tourism for Singapore between 1972 and 1988. Computes four standardized instability indexes for both merchandize exports and international travel receipts, having suitably adjusted the official export series for re‐exports and corrected the two data series for trend. There is some support for the view that export receipts are more unstable than tourism receipts. Although exports are generally more unstable over the whole period, they were relatively more unstable in the early to mid‐1970s during a period of international instability. Tourism receipts, on the other hand, were relatively more unstable in the 1980s, partly as a result of world recession, but also because of structural problems in the tourism industry in Singapore. Also finds that the development of the tourism sector in Singapore has exerted a net destabilizing effect on total exports of goods and services.