Determinants of the demand for US exports and imports of tourism

Abstract

This study estimates real income and relative price elasticities of demand for US exports and imports of tourism with annual data from 1973–2002. Overall, there is empirical support for the model of tourism expenditure. With one exception, the estimated parameters have the correct signs, and most are significantly different from zero. The US trading partners appear to be more sensitive to the determinants of international tourism than is the US The greater response (of the US trading partners) to changes in real income may account for the US running surpluses on its tourism balance during 16 of the 29 years of our sample period.

Notes

¹ Data on E are from Federal Reserve Board of Governors. Nominal tourism expenditures are from Table 1 US International Transactions, BEA International Economic Accounts, US Department of Commerce. Data on other variables are from Source OECD Maine Economic Indicators.