Tourism expenditure in post-earthquake Christchurch, New Zealand

ABSTRACT

This paper investigates whether tourism expenditure and exchange rates influence local GDP for the city of Christchurch (New Zealand), following the 2010 and 2011 earthquakes. Domestic and international expenditures are analysed separately using vector auto-regression (VAR) models. We perform Granger causality tests to determine the directionality of the relationships uncovered. Our results show that increased domestic and international visitor spending is followed by a measurable and significant increase in local GDP. Exchange rates have a small but non-significant impact on international tourist spending. Stimulating tourism demand will be an essential element to achieve substantial economic growth in Christchurch. The findings have implications for policy making in terms of promoting economic growth in disaster prone areas.

KEYWORDS:

• Natural disasters
• economic growth
• tourism expenditure
• VAR
• GDP

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. For all unit root tests, we validated the results of the Dickey-Fuller test via the Kwiatkowski-Phillips-Schmidt-Shin (Kwiatkowski, Phillips, Schmidt, & Shin, 1992) test.

Additional information

Notes on contributors

Girish Prayag

Girish Prayag is an Associate Professor of Marketing in the University of Canterbury Business School. His research interests are related to place attachment and the resilience of tourism businesses in disaster areas. His work has appeared in leading tourism and hospitality journals such as Tourism Management and Journal of Travel Research. He is currently the editor of Method and Practice for the journal Current Issues in Tourism.

Peter Fieger

Peter Fieger is an adjunct Associate Professor in the UNE Business School at the University of New England, Australia. In addition, he currently leads as Senior Economist a team of economic researchers at the Canterbury Development Corporation, based in Christchurch, New Zealand. His most recent research focuses on survey methodology, the economics of tourism and the relationship between tourism and regional economic development.

John Rice

John Rice is Professor of Strategic Management at the University of New England. He is Discipline Leader for the Management and Marketing group within the UNE Business School and serves on the UNE Academic Board. He teaches in the areas of strategic management and general management and has supervised more than ten doctoral students to completion. He writes regularly for The Conversation on issues relating to business and education.