Special issue on advanced methods to measure tourism impacts. Editors’ introduction

Portuguese Economic Journal -     

Measuring worker flows

The study explores differences between two measurement concepts of worker flows widely used in the literature referred to as the turnover and reallocation concepts. It is found that measuring worker flows by the turnover concept leads to substantially (about 5% of total employment) higher worker flow estimates and slightly increases age, size and industry group effects on firm level worker flows as well as differences between growing and declining firms relative to the reallocation concept.     

Long-Term Forecasts for Tourism Industries: the Case of Austria and Switzerland

This paper outlines the design of a causal econometric model for world tourism. The model allows for long-term forecasts of outgoing and incoming tourism for each country considered (here with a special emphasis on Austria and Switzerland) in a consistent international model setting. The main forecast result in the baseline scenario is that Austria gains market share in the long run, Switzerland loses significant market share. The growing tourism import demand resulting from the completion of the international European Community (EC)- market is widely allocated to the EC-member countries and the overseas destinations in the form of additional export growth. The non-EC member Austria loses market share. Switzerland would have even greater market share losses compared to the baseline scenario.     

Econometric forecasts of tourism demand to 2005

A complete system of demand equations which was developed previously to generate forecasts of tourism imports and exports is modified to allow for destination-specific demand structures in the tourism export functions. The new model is shown to be considerably more realistic than the original one, and represents a major conceptual improvement. Furthermore, the modified complete system of demand equations yields more accurate outof-sample forecasts, across both varying time horizons and types of forecast. The new model is used to generate forecasts of tourism imports and exports for 18 countries and various major geographical areas, including the recently expanded European Union, for the period up to 2005 for different scenarios.     

Alternative Modelle und Hypothesen der Konsum- und Sparentscheidung(1)

Summary For the analysis of the allocation of personal disposable income to the different consumption goods and savings, an indirect-addilog-expenditure-system (IAES) has been constructed. Compared to the linear-expenditure-system (LES) the IAES to far more flexible and is not based upon the idea of minimum-consumption- or minimum-saving-quotas. On the other hand, marginal income shares are not fixed parameters. The IAES allows the derivation of a systematic savings- and consumption-function and supplies consistent income elasticities. But it will be shown that consistent demand systems are only restrictively able to consider all major determinants of the decision-problem consumption or saving. The derived system does not only neglect the effects of wealth on consumption and savings but also the results of real income fluctuations due to the business cycle. Also phenomena like unemployment and uncertainties regarding estimates of the future or inflation are neglected. With the help of an adjustment-procedure a part of these disadvantages has been eliminated. The adjustment with regard to the entire private consumption and savings supplied income elasticities which lead to an almost constant consumption- and savings-share in the period under investigation.     

Ein Entscheidungsmodell für Konsumieren und Sparen

Summary The present study analyses the simultaneous problem of consumption and saving by means of a consistent demand system; for this purpose the linear—expenditure—system (LES), developed by R. Stone, has been modified and used as a methodological base. Saving takes, for the sake of operationality, the character of a consumer—good and becomes an argument of the utility function. The usual neoclassical assumption of utility maximization allows the derivation of a linear expenditure system of consumption and saving (LESSC) when prices and income are given. The simultaneous LESSC-model has remarkable weaknesses, however: the assumption of certainty, the static character of the model, the disregard for major savings—motives and private expenditure on homebuiding led to bad elasticity—estimates. The assumpion of directly—additive utility functions causes furthermore collinearity between income—and price—elasticities such that the meaning of the derived elasticities is greatly reduced.The income—elasticities derived from the LESSC are positive throughout but show a remarkable variance. The calculation of the Friedman—bias demonstrates a rather strong bias due to the assumption of certainty. A modification resulted in income—elasticities of private consumption and savings of around 0,93 (unmodified: 0,88) and 1,41 (unmodified: 1,76). The demand for consumption goods of great necessity was income—inelastic whereas the demand for goods of less importance to survival was income—elastic. An analysis of income—elasticities of the disaggregated system and the relation between transitory components of consumption and income existing in Austria gave the impression that unexpected changes in income are not only reflected in saving but also in changes of the consumption—structure.The respective price—elasticites are all negative and smaller than 1. For less important consumption—goods lower price—elasticities have been measured and for easily substitutable goods higher ones. Marked crossprice—elasticities could only by discovered with clothing and food products. Generally it can be said that an increase in prices of goods of the daily needs hits both the expenditure on easily substitutable consumption goods and causes dissaving.A comparison with the elasticities calculated through OLS shows a greater reliance of LESSC—elasticities as far as data of differing aggregation levels are concerned.

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Mécanique Sociale may one day take her place along with Mécanique Celeste throned each upon the double—sided height of one maximum principle, the supreme pinnacle of moral as of physical science.     

Ein exportallokationsmodell für die westlichen industrielÄnder

Summary A Model of Export Allocation for the Western Industrialized Countries. —Adequate modifications allow the application of the “linear-expenditure system” (LES) to international trade which —properly speaking —was conceived to explain the demand flows. A linear-expenditure system for the merchandise exports of 18 industrial countries (LESX) has been developed, based upon the hypothesis that the economic agents want to import as many goods as possible with given export prices and import budget, where the possibility exists to choose between the merchandise exports of the different industrial countries and to decide in favor of the optimal import quota according to the relative price conditions. The LESX is sufficient for the conditions of consistent demand systems. The import budget elasticities or income elasticities derived from the LESX are all positive and are to be understood primarily as a magnitude for the long-term development of the market share. The elasticities of the export prices are less than 1. The direct price elasticities and the cross-price elasticities are all negative, the elasticities of substitution are positive. The average direct export price elasticities and the substitution elasticities of the 18 industrial countries amount to —0.585 and 0.559. The statical character of the LESX, the positive “minimum import quantities,” the assumption of certainty, as well as a collinearity between the import budget elasticities and export price elasticities cause a substantial restriction of the dependability of the derived elasticities, so that the advantages of a consistent demand system partly disappear.

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Résumé Un modèle d’allocation exportatrice pour les pays industrialisés de l’Ouest. —Quelques modifications permettent d’appliquer le ?système linéaire de dépense? (SLD), originalement développé pour l’explication des flux de demande, au commerce international. En partant de la supposition que les sujets d’économie veulent importer tant de produits que possible sous des prix d’exportation donnés et sous la contrainte d’un budget d’importation donné aussi bien qu’avec la possibilité de choisir entre les exportations des biens des différents pays industrialisés et de se décider pour les contingents optimum sur les importations suivant les relations des prix relatifs, nous avons développé un système linéaire de dépense pour les exportations des biens (SLDX) des 18 pays industrialisés les plus importants. Le SLDX satisfait les conditions des systèmes de demande consistants. Toutes les élasticités de budget d’importation et de revenu dérivées du SLDX sont positives et doivent être comprises essentiellement comme une mesure pour le développement de la participation au marché à long terme. Les élasticités des prix exportatrices sont moins que un. Toutes les élasticités directes des prix et les élasticités croisées de la demande sont négatives, les élasticités de substitution sont positives. La moyenne élasticité directe de prix exportatrice et l’élasticité de substitution des 18 pays industrialisés se montrent à —0.585 et 0.559. Le caractère statique de SLDX, les ?quantités d’importation minimum? positives, la ?supposition de certitude? et une collinéarité entre les élasticités de budget d’importation et de prix exportatrice effectuent une réduction essentielle concernant la capacité explicative des élasticités dérivées, de sorte que les avantages d’un système de demande consistant fussent partiellement éliminés.

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Resumen Un modelo de asignación de exportaciones para los países industriales occidentales. —El sistema ?linear-expenditure-system? (LES), dise?ado en si para explicar las corrientes de demanda, puede ser aplicado al comercio internacional una vez efectuadas las modificaciones correspondientes. Si se parte del supuesto que los entes económicos ante precios de exportatión y un presupuesto de importación dados desean importar la mayor cantidad de bienes posible, existiendo la posibilidad de elejir entre bienes exportados por los distintos países industriales y de decidirse de acuerdo a las relaciones de precios por las cuotas de importación óptimas, se desarrolló un sistema de gastos lineal para las exportaciones (LESX) de los 18 paises industriales más importantes. El LESX satisface las condiciones de sistemas de demanda consistentes. Las elasticidades de ingresos y de presupuestos de importación derivadas del LESX son todas positivas y deben ser entendidas en primer lugar como medida de tama?o para el desarrollo de las participaciones de mercado de largo plazo. Las elasticidades-precio de las exportaciones son menores que uno. Las elasticidadesprecio directas y las elasticidades-precio cruzadas son todas negativas. Las elasticidades de sustitución son positivas. La elasticidad-precio directa promedio de las exportaciones y la elasticidad de sustitución de los 18 países industriales es —0.585 y 0.559 respectivamente. El carácter estático del LESX, ?cantidades de importación mínimas? positivas, el ?supuesto de seguridad? corao también una colinearidad entre las elasticidades del presupuesto de importación y de los precios de exportación constituyen una limitación fundamental para la capacidad de predicción de las elasticidades derivadas, de tal manera que las ventajas de un sistema de demanda consistente se absorven en parte.

     

Ein gesamtwirtschaftliches Allokationsmodell: Das Linear-Expenditure-System im Falle Österreichs

Zusammenfassung Das linear-expenditure-system (LES) ist eines der bekanntesten Allokationsmodelle und wurde vonR. Stone im Rahmen der neoklassischen Konsumtheorie entwickelt. Entsprechende Modifikationen erlauben jedoch, das an und für sich zur Erklärung von Nachfrageströmen konzipierte LES auf die Gesamtwirtschaft anzuwenden: Ausgehend von der Annahme, daß die Wirtschaftssubjekte einer Volkswirtschaft bei gegebenen Preisen und der Endverwendung möglichst viele Güter absorbieren wollen — wobei zwischen den importierten Gütern selbst sowie den im Inland hergestellten Gütern insgesamt gewählt werden kann — um sich je nach den relativen Preisverhältnissen für die jeweils optimalen Importquoten zu entscheiden, wurde ein lineares Ausgabensystem für Warenimporte und im Inland hergestellte Güter (LESM) entwickelt. Das LESM gehügte den Einschränkungen der neoklassischen Nachfragetheorie (Adding up-, Homogenitäts- und Symmetriebedingung). Die aus dem LESM abgeleiteten Einkommenselastizitäten sind mit Ausnahme der Einkommenselastizität für Ernährung alle größer als Eins. Die Preiselastizitäten sind durchwegs negativ; die direkten Preiselastizitäten und die Substitutionselastizitäten sind kleiner als Eins. Ein Vergleich der Einkommenselastizitäten mit den verschiedenen Preiselastizitäten der einzelnen Einfuhrgruppen zeigt eine völlig identische Hierarchie der verschiedenen Elastizitäten. Es wird gezeigt, daß die auftretende Kollinearität zwischen den Preis-und Einkommenselastizitäten — kurzPigou's-Law — keineswegs ein zufällig auftretendes Phänomen ist, sondern Inhalt vonjedem Nachfragesystem, das auf der Annahme einer direkt-additiven Nutzenfunktion beruht.Die Gegenüberstellung der LESM- und OLS-Resultate betonte die auf die Erfüllung der Budgetbeschränkung beruhende Überlegenheit der LES-Modelle gegenüber den OLS-Modellen.

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Summary The present paper is based upon the assumption that the decision problem of total expenditure or absorption of the household has been solved such that we can concentrate on the allocationproblem. One of the best known allocation models in the linear-expenditure-system (LES) byR. Stone, which has been developed within the neoclassical consumption framework. Several modifications allow for an application of the LES, which has been conceived of as an explanation of demandflows, towards the total economy. A linear expenditure system for imported as well as domestically produced goods (LESM) has been developed under the assumption that all economic agents in an economy want to absorb the maximal amount of goods with prices and final consumption given. There is a possibility to choose between imported and domestically produced goods such that depending upon their relative prices the respective optimal importquotas are decided upon.This paper is composed of essentially three parts: in the first the theoretical roundations are being presented; the second part concentrates upon the estimation and the third upon the analysis of the results, which are then confronted with OLS-results.The LESM conforms to the restrictions of neoclassical demand theory (the adding—up—, homogeneity and symmetrical conditions). The income elasticities derived from the LESM are, with the exception of foodstuffs, all greater than one. All price-elasticities are negative; the direct price-elasticities and the elasticities of substitution are smaller than one. A comparison of income-elasticities with the different price-elasticities of importgroups show an identical hierarchy of elasticities. It can be shown that the collinearity between price- and income-elasticities-in shortPigou's Law-is not a random phenomenon, but can be encountered in every demand system built upon the assumption of directly additive utility functions.The confrontation of LESM- and OLS-results confirms the superiority of the LES-models, which rest upon the fulfillment of the budget-constraint. An analysis of the OLS-results shows that the budgetconstraint has not been realized and that the price-elasticities were not negative in all instances such that the income-and price-elasticities derived from the OLS-model can't be relied upon.

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Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.     

Emerging Eastern European tourism markets

The collapse of communism led many to see Eastern Europe as a major new market both for the development of tourism and the generation of outbound travel. While both are likely in the long term, current economic confusion (in the West as well as the East) makes their realization much more difficult in the short term. This article analyses the economic future for the countries of Eastern Europe, the travel behaviour of their citizens and the outlook for tourism in the region.     

Varying Elasticities and Forecasting Performance

This study assumes that tourists' demand reactions to income and price changes are asymmetric at different phases of the business cycle. In order to test this hypothesis, we analyzed the demand for international tourism in five source markets using a modified growth rate (MGR) model. The empirical evidence demonstrates that income elasticity is indeed asymmetric across the business cycle in four source markets. In addition, asymmetric price effects were found for one source market. To compare forecasting performance, we also estimated a time‐varying parameter (TVP) model. The results show that the MGR model generally outperforms the TVP model. Copyright © 2013 John Wiley & Sons, Ltd.