1. Unveiling the mystery of the responsiveness of inbound tourism to economic policy uncertainty: New evidence from Australia.
- Author
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Gong, Yuting, Chang, Chia-Hsun, Lee, Paul Tae-Woo, Yin, Jingbo, and Shi, Wenming
- Subjects
IMPULSE response ,ECONOMIC uncertainty ,INBOUND tourism ,AUTOREGRESSIVE models ,COVID-19 pandemic - Abstract
Using a time-varying parameter vector autoregressive (TVP-VAR) model, this study analyzes how inbound tourist arrivals (TOUR) respond to EPU in Australia. Empirical results show that EPU can Granger cause TOUR in most cases before COVID-19, whereas little evidence supports this finding after the pandemic. At the national level, it is found that EPU was the net risk transmitter before COVID-19 but became the net risk receiver after COVID-19, while TOUR was the net risk receiver over March 2007-March 2020 but became the net risk transmitter in the remaining months. The impulse response functions reflect that a 2.81% decline in the total TOUR was observed due to a 1% increase in EPU, which gradually decayed within 9 months for the sub-sample before COVID-19. Similar findings hold at the state/territory level. These findings provide profound evidence for the national and state/territory governments to allocate tourism resources and formulate supportive tourism policies. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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