Semester

Fall

Date of Graduation

2018

Document Type

Dissertation

Degree Type

PhD

College

Davis College of Agriculture, Natural Resources and Design

Department

Agricultural and Resource Economics

Committee Chair

Peter Schaeffer

Committee Co-Chair

Xiaoli Etienne

Committee Member

Timothy Phipps

Committee Member

Michael Dougherty

Committee Member

Tesfa Gebremedhin

Abstract

The global tourism industry has experienced sustained growth over the years even in the face of economic shocks. International travel for tourism purposes continues to grow albeit at different rates in developed and developing countries. The trend is suggestive of the significant impact of tourism on the global economy and social phenomena since the last century. A similar trend is observed in the United States as tourism contributes to the economy by generating revenues and creating jobs. The United States is a significant player in global tourism, being the largest exporter and the second largest importer of tourism. It is also the leading recipient of revenues from international tourists (ITA-NTTO, 2015). The growing relevance of tourism to economic development in the United States underscores the need to explore the nature of this relationship. This study, therefore, investigates the relationship between tourism demand and economic growth in three papers.

The first essay discusses the nature of the causal linkages between tourism and economic growth and how these respond to shocks in the system using the Autoregressive Distributed Lag model, the Impulse Response Function, and the Generalized Variance Decomposition respectively. The second essay investigates the economic growth and disaggregated tourism industries including accommodation, air transportation, shopping, food and beverage, other transportation, and recreation and entertainment. The paper employed the ARDL Bounds test and the Toda-Yamamoto Augmented Granger causality test to determine the direction of causality. In the third essay, I use a variety of econometric methods within the gravity model framework to highlight the static and dynamic determinants of inbound tourism to the United States. The findings from these essays confirm the economic-driven tourism growth (EDTG) hypothesis when aggregate tourism data is used. When disaggregated, the results show causality running from economic growth to each of the six tourism sub-industries. The results also emphasize the importance of some push and pull factors that influence U.S. tourism demand. The gravity variable such as incomes of the origin and destination countries and distance are significant determinants of inbound tourism to the U.S. Other economic, demographic, cultural, government policies, and incidental factors have a significant influence on tourism demand. The study further confirms the Linder hypothesis in the U.S. tourism literature and observe that habit persistence and/or word-of-mouth drive foreign visit to the United States.

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