Is there a causal relationship between oil prices and tourist arrivals?

Abstract

This application note investigates the causal relationship between oil price and tourist arrivals to further explain the impact of oil price volatility on tourism-related economic activities. The analysis itself considers the time domain, frequency domain and information theory domain perspectives. Data relating to US and nine European countries are exploited in this paper with causality tests which include time domain, frequency domain, and Convergent Cross Mapping (CCM). The CCM approach is nonparametric and therefore not restricted by assumptions. We contribute to existing research through the successful and introductory application of an advanced method, and via the uncovering of significant causal links from oil prices to tourist arrivals.

Keywords:

• Oil price
• tourist arrivals
• causality
• convergent cross mapping
• Granger causality

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Note that the detailed diagrams of testing results by countries, types of oil prices and directions of causality are available upon request.

2 Note that the detailed diagrams of testing results by countries and types of oil prices are available upon request.