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Brexit uncertainty and volatility persistence in tourism demand
Univ Vaasa, Finland.
Southampton Univ, England.
Linköping University, Department of Management and Engineering, Economics. Linköping University, Faculty of Arts and Sciences.
Temple Univ, PA 19122 USA.
2021 (English)In: Current Issues in Tourism, ISSN 1368-3500, E-ISSN 1747-7603, Vol. 24, no 16, p. 2225-2232Article in journal (Refereed) Published
Abstract [en]

Tourism has emerged as one of the leading components of aggregate economic growth in most developed economies, especially in the UK, where it is predicted to grow at an annual rate of 3.8% through 2025. Because tourism demand represents individuals choice between leisure and work, a persistence of negative shocks, such as Brexit uncertainty, can be detrimental to the growth of tourism via its impact on agents utility function of a directed consumption of leisure for a specific country. This note fills a gap in the literature by providing an econometric estimate of time-varying volatility in tourism demand following Brexit-driven Economic Policy Uncertainty. Using seasonally adjusted and trend-extracted tourist arrival series along with Brexit uncertainty, we find a strong evidence of long-run persistence in (asymmetric) volatility in tourist arrival. In particular, the BREXIT referendum appeared to create ambiguity among international visitors to the UK. Our results have important policy implications.

Place, publisher, year, edition, pages
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD , 2021. Vol. 24, no 16, p. 2225-2232
Keywords [en]
Tourism demand; asymmetric GARCH; structural breaks; volatility persistence; Brexit; Hamilton filter
National Category
Economics
Identifiers
URN: urn:nbn:se:liu:diva-170551DOI: 10.1080/13683500.2020.1822300ISI: 000572526700001OAI: oai:DiVA.org:liu-170551DiVA, id: diva2:1476954
Note

Funding Agencies|Jan Wallanders och Tom Hedelius Stiftelse samt Tore Browaldhs Stiftelse

Available from: 2020-10-16 Created: 2020-10-16 Last updated: 2022-10-06

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • oxford
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf