Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia

Chia-Lin Chang, Thanchanok Kha

Abstract

Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia This paper analyzes the responsiveness of Thai outbound tourism to East Asian destinations, namely China, Hong Kong, Japan, Taiwan and Korea, to changes in the effective relative price of tourism, total real total tourism expenditure, and one-off events.  The nonlinear and linear Almost Ideal Demand (AID) models are estimated using monthly data to identify the price competitiveness and interdependencies of tourism demand for competing destinations in both long-run (static) and shortrun (dynamic) error correction specifications. Homogeneity and symmetry are imposed in the long-run and short-run AID models to estimate the elasticities.