International tourism and consumer prices in Pakistan: a wavelet-based analysis

ABSTRACT

This study aims to investigate the relationship between the tourism activities and price level in Pakistan by using monthly data set from 1972 to 2016. In this study, aggregated as well as disaggregated price level have been considered. Co-integration results suggest significant long-run relationship between tourism and all price level of goods and services except fuel and lightning. Results of the wavelet transformation show a strong variation in short-run. The results of the wavelet transformation coherence also show an in-phase as well as out-phase both associations between the prices and tourism receipts in the mid-term and long-term periods.

KEYWORDS:

• Tourism
• consumer prices
• Pakistan
• wavelet approach

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Syed Tehseen Jawaid http://orcid.org/0000-0002-5639-4788

Notes

1. See World Travel and Tourism Council (2018, p. 1).

2. Qayyum and Sultana (2018), Ellahi (2017), Bashir, Yousaf, and Aslam (2016), Ali, Jan, and Khan (2015), Ahmed, Raza, Hussain, and Lal (2013), Asghar, Ja_ri, and Asjed (2013), Aurangzeb and Haq (2012), Bashir et al. (2011), Khan and Gill (2010).

3. See Harris and Todaro (1970, pp. 127–131).

4. Also see Abdullah et al. (2009) and Bashir et al. (2011).

5. Dickey and Fuller (1979).

6. Phillips and Perron (1988).

7. Gregory and Hansen (1996) and Zivot and Andrews (1992).

8. Structural break unit root test indicated that ITR and consumer prices contain a unit root with structural breaks.

9. The results of Gregory and Hansen (1996) structural break test confirms the long run co-integration among the ITR and consumer prices with structural break.

10. Pesaran and Shin (1999).

11. Haug (2002).

12. Pesaran and Shin (1999) and Pesaran, Shin, and Smith (2001).

13. Schwarz (1978).

14. Arrows directed towards the left shows that the variables (prices and tourism receipts) are out of phase and are having anti cyclic effect on each other.

15. When Small arrows are moving to the right, it means that the variables (prices and tourism receipts) are in-phase and are having cyclical effect on each other.