Exploring the nexus between urbanisation, inflation and tourism output: empirical evidences from the Fiji Islands

ABSTRACT

The main aim of this study is to investigate the relationship between urbanisation, inflation and tourism output of Fiji. This study used the Autoregressive Distributed Lag bounds test to examine the relationship between urbanisation, inflation and tourism output by using annual time series data for the period 1985–2015. This study has found that urbanisation, inflation and tourism output share a long-run relationship when urbanisation and inflation are used as the dependent variables. The results of this study confirm that in the long run, tourism output has a significant and positive impact on urbanisation. This implies that a 1% increase in tourism output will increase urbanisation by 0.000165%. In the short run, urbanisation and inflation do not affect the tourism output of Fiji. The findings from this study have implications for the policy-makers and practitioners. Policy-makers should play an essential role in expanding tourism activities in the rural areas. In Fiji, there is development disparity between the urban and rural areas. The government has to invest more financial resources in the development of tourism activities in the rural areas.

KEYWORDS:

• Unit root test
• Fiji Islands
• long-run co-integration
• urbanisation
• inflation
• tourism output

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. This is a predicted value for the year 2014. The actual values provided by the Bureau of Statistics are outdated.