Investigating stationarity in tourist arrivals to India using panel KPSS with sharp drifts and smooth breaks

ABSTRACT

In the study, we applied panel-based stationary test that incorporates sharp as well as smooth breaks to investigate the non-stationarity of long-run tourists’ arrivals to India from major tourists’ source countries for the period 1981–2012. Results from the overall panel data provided significant evidence to support the stationarity hypothesis. However, when tourist arrivals from major source countries are considered, results indicate that tourist arrivals in India from the UK, Canada, Australia, Singapore, and Nepal were non-stationary, suggesting that tourists from these countries are all affected by economic conditions with the greatest extent. The results of the study have important policy implication for the tourist authority of India as well as business sectors in the hospitality industry for understanding and predicting market condition.

KEYWORDS:

• Break
• panel KPSS test
• Fourier function
• tourist arrivals

JEL CLASSIFICATION:

• C22
• C23
• L83

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Results are not reported here but are available upon request from the author.