Authors
Abstract
The main objective of this paper is to estimate the foreign tourism demand for Iran from India, Pakistan and Turkey during 1974-2005. This study proposes a new technique – the time varying parameter (TVP) approach to tourism demand modeling. To that end, the behavioral change of tourists over time is traced using the Kalman filter approach.
The main findings of this paper reveal that the foreign tourism appears to be a normal good and inelastic to the domestic prices. In addition, habit information is an important factor of Iran’s tourism demand. Comparing income elasticity and own price elasticity between these countries show that the tourism demand from Turkey has a better situation to other countries.
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