Dynamics of Toursm Demand Models in Japan

Transcription

1 hort-run and ong-run structural nternatonal toursm demand modelng based on Dynamc AID model -An emprcal research n Japan- Atsush KOIKE a, Dasuke YOHINO b a Graduate chool of Engneerng, Kobe Unversty, Kobe, , Japan; E-mal: koke@lon.kobe-u.ac.jp b Economc Plannng Group, Fukken Co., td., Tokyo, , Japan; E-mal: d-yoshno@fukken.co.jp Abstract: When we suggest some polces whch promote nbound and/or outbound toursm market, we should not only focus on the toursm demand n a certan regon but also natonal nteractons. To solve ths problem, ths study has developed the methodology for quanttatve analyss of demand structure for toursm by focused on the elastcty of destnaton choce actvtes. The demand functon of destnaton choce actvtes s defned as a Dynamc AID (Almost Ideal ystem) model. The man goal of ths study s to examne the applcablty of AID model to estmaton of the Japanese nternatonal toursm demand. Keywords: Dynamc AID, Elastctes, Inbound and Outbound, Toursm demand 1. INTRODUCTION In the late 1980s, the Japanese government had formulated A ten mllon plan. Ths plan had amed to brng the number of Japanese who traveled abroad to 10 mllon/year wthn fve years. Thus, they decded to promote the outbound toursm. In the background of ths plan, the government had tred to solve a trade mbalance arsng from expanson of made-n-japan products, and they also had made an effort to promote the toursm exchange. Ths plan had been acheved the goal n It was earler than the planned perod because of a hgh-yen and a boomng economy n Japan. After that, because of the burstng of Japan's bubble economy, the government had swtched to promote the nbound toursm to get foregn exchanges. From 2003, the government had launched the "Vst Japan Campagn" and they had been tryng to ncrease ncomng foregn traveler number to 10 mllon/year by ater, n 2007, the government had swtched to promote both n- and outbound toursm. Because Japanese foregn travelers put a large amount of foregn currency nto the varous countres they vst, and t produces huge economc assstance. Both n- and outbound toursm demands n Japan have been ncreasng from 1970, and the regonal composton rato of toursm demand has changed from year to year (see Fgure 1 and 2). It mght be caused by changes of the destnaton choce actvty, whch s affected by global economc stuatons; lke consumpton expendture of toursts, fluctuaton of prce and exchange rates etc. Therefore, f we suggested some polces whch promote n- and outbound toursm market, we should focus on not only a certan regon but also natonal nteractons.

2 Number of Jaopanese Oversea toursts (thous people) 25,000 20,000 15,000 10,000 5,000 Oceana Asa Europe North Amerca Fgure 1. Number of Japanese Oversea Toursts ( ). Data source: Whte paper on toursm (Japanese mnstry of land, nfrastructure, transport and toursm, ) Number of Foregn Toursts to Japan (thous people) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 Oceana Asa Europe North Amerca 1, Fgure 2. Number of Foregn Toursts to Japan ( ). Data source: Whte paper on toursm (Japanese mnstry of land, nfrastructure, transport and toursm, )

3 To solve ths problem, ths study has developed the methodology for quanttatve analyss of toursm demand structure by focused on the elastcty of destnaton choce actvtes. The demand functon of destnaton choce actvtes s defned as a Dynamc AID (Almost Ideal ystem) model. Ths model developed to estmate varous elastctes such as own-prce, cross-prce, and expendture. Ths approach had been appled n European toursm market (ex. Durbarry and nclar (2003)). However, there had been no lterature deals wth Japanese one. Therefore, the man goal of ths study s to examne the applcablty of AID model to estmaton of the Japanese nternatonal toursm demand. Ths paper s organzed as follows. ecton 2 revews exstng lteratures focusng on the estmaton of toursm demand. In secton 3, the theory and characterstcs of the Dynamc AID model proposed n ths study are descrbed. The followng secton 4 descrbes results of the model estmaton and key concluson and future tasks are summarzed n secton METHODOOGICA REVIEW 2.1 Tradtonal Approach to Estmatng Toursm Much of the lterature on toursm demand has examned demand at the natonal level, although t can also be examnes for dfferent components of toursm, such as accommodaton or attractons. It s known that toursm demand s responsve to such varables as ncome, relatve prces and exchange rates. What s not known s how the responsveness of demand to changes n these varables alters durng a regons economc transton and ntegraton nto the wder nternatonal communty. In addton, the degrees of complementarty and substtutablty between destnatons and the extent to whch these change durng perods of economc transton should be concerned. ome knds of model have been used n lterature to estmate toursm demand. The large majorty studes of toursm demand have based on sngle equaton models of demand, estmated wthn a statc theory. Ths knd of model s not derved from consumer demand theory, and t cannot quantfy the changes n demand behavor that occur over tme. After that, nnovatons n the methodology were ntroduced later n the form of sngle equaton models of demand estmated usng and error correcton methodology (ex. oeb, 1982; Uysal and Crompton, 1984). And more recently, ong et al. (2000) used the error correcton model to estmate the U.K. toursm demand n the form of vsts per capta to outbound destnatons and demonstrated that the model has good estmaton ablty. Ths modelng approach has the advantage of explct treatment of the tme dmenson of toursm demand behavor, and allows for mproved econometrc estmaton of the specfed equatons. But as Durbarry and nclar (2003) noted, the man problem of the tradtonal sngle equaton model concerns the lack of relablty n the accuracy of the provded results, because the approach lacks a strct bass n consumer demand theory. The AID model of toursm demand s clearly superor n ths respect. 2.2 About AID Model The thrd approach to toursm demand estmaton nvolves system of equatons models such as the AID model. The AID model s used n the feld of household expendture analyss, consumpton of goods, trade shares, etc. (ex. Blundell and Brownng, 1994; Eakn and Gallagher, 2003; Choo et al., 2007). The advantages of the model contan ts strct groundng n economc theory, the relatve smplcty wth whch t can be estmated, and the flexblty

4 wth whch t can be appled to dfferent contexts. Recent applcatons n the feld of toursm suggest that Deaton and Muellubauer s (1980) AID model provdes a well-structured framework for modelng toursm demand. It s based on economc theory, satsfes the prncple of choce exactly and be used to test homogenety and symmetry restrctons. ome studes have appled ths approach n current toursm demand analyss (ex. Mello et al., 2002; Wtt and Wtt, 1995; Durbarry, 2002). Untl recently, lteratures whch apply the AID had been focused on statc soluton. The statc AID model assumes that there s no dfference between short- and long-run behavors. It means consumers behavor s always n equlbrum. However, t s true that many factors often cause the consumer to be out of equlbrum untl full adjustment takes place. Therefore, the assumpton of the statc AID model s unrealstc n some cases. As a result of the nablty of the long-run specfcaton to explan dynamc adjustment of toursm demand, recently, some researches have focused not only long-run soluton, but also short-run dynamcs by usng Dynamc AID model (ex. Durbarry and nclar, 2003; et al., 2010; Chang et al., 2012). For example, Durbarry and nclar (2003) examnes the magntudes and determnants of changes n destnatons shares of a major tourst orgn market based on the dynamc AID model. They used the model to quantfy the responsveness of French toursm demand n European countres to change n prce ndex, and both long- and short-run demand elastctes have been calculated. et al. (2010) and Chang et al. (2012) also estmated to dentfy the prce compettveness and nterdependences of toursm demand for competng destnatons n both long- and short-run error correcton specfcatons. There are few emprcal studes of nternatonal toursm demand usng econometrc models for Japan. As prevous estmates from AID models n the lterature have suggested that useful mplcatons can be made regardng toursm compettveness, the AID approach for both statc and dynamc specfcaton wll be used to nvestgate Japan outbound/nbound demands for varous destnatons/orgns whole world. 3. MODE EXPANATION AND DATA 3.1 Tradtonal tatc AID Model In ths secton, the theory and characterstcs of the Dynamc AID model proposed n ths study are descrbed. Frst of all, we ntroduce the tradtonal statc AID model whch forms the bases of Dynamc AID model. Followng Deaton and Muellbauer (1980), we defne the toursm expendture functon of -th destnaton regon as 1 ln E p; u 0 ln p j ln ln p p j j u0 p 2 (1) where, E : total toursts expendture, p : prce of toursm, u : utlty, : destnaton regon, j : alternatve destnatons,

5 0,, 0,, j : parameters need to be estmated. The demand functons can be derved drectly from equaton (1). It s a fundamental property of the cost functon (see hephard, 1970) that ts prce dervatves are the quanttes E p u p q, we fnd the budget share of -th destnaton regon w as demanded: ; ; ln E p; u pq p E p u w E p ; u E p ; u p ln p (2) Hence, logarthmc dfferentaton of (1) gves the budget shares as a functon of prces and utlty: (3) w ln p u p j j j 0 where, the lmtaton j j s mposed. For a utlty-maxmzng consumer, total expendture x s equal to E(p;u) and ths equalty can be nverted to gve u as a functon of p and x, the ndrect utlty functon. If we do ths for (1) and substtute the result nto (3) we have the budget shares as a functon of p and x; these are the AID demand functons n budget share form: x w j ln pj ln j P (4) where, P s prce ndex, and t s expressed as follows: 1 ln P 0 ln p ln p ln p j 2 (5) j j The restrctons on the parameters comply wth the assumptons and ensure that equaton (5) defnes P as a lnear homogeneous functon of ndvdual prces. If prces are relatvely collnear, P wll be approxmately proportonal to any approxmately defned prce ndex, for example, the one use by tone (Deaton and Muellbauer, 1980). Hence, n ths study, P n equaton (5) can be smplfed usng the tone prce ndex (tone, 1954). ln P wln p ( tone prce ndex) (6) 3.2 Formulaton of Dynamc AID model A statc AID specfcaton gnores potental sgnfcant short-run elastcty measures that dffer from the long-run estmates. Moreover, n the context of tax polcy and busness strategy, decson-makers are more lkely to be more concerned wth short-run elastcty estmates and the speed to whch these estmates reach ther long-run level. A dynamc AID model that ncorporates such short-run estmates s an error correcton representaton of the

6 AID model. Ths form s descrbed as the partal dfferental equaton of frst order. In ths equaton, means long-run and means short-run. x x wt t j t ln p jt ln wt 1 t 1 j tq ln p jt1 t 1 ln Pt P (7) where, : the dfference operator ( xt xt xt 1). t1 Ths equaton captures the dynamcs of the toursm demand, showng that current changes n budget shares depend on not only current change n the normal AID explanatory varables, but also on the extent of consumer dsequlbrum n the prevous perod. In the long-run, the coeffcents of the prce varables,, represent the absolute change n the prce of regon j, ceters parbus. Thus, the prce varable take account of the effectve prce n the destnaton regon relatve to those n other destnatons. The coeffcents represent the absolute change n the -th expendture share gven a 1% change n real per capta expendture. The parameter measures the speed of adjustment to the long-run equlbrum, for example, =1 adjustment s nstantaneous. The restrctons on the parameters of (1) mply restrctons on the parameters of the AID equaton (7). We take these n three sets: Addng-up restrctons: term term term 1, 0, 0 term, j (8) Homogenety: term j 0 term, (9) j ymmetry: term term j j term, (10) Provded (8), (9), and (10) hold, equaton (7) represents a system of demand functons whch add up to total expendture ( w 1), are homogeneous of degree zero n prces and total expendture taken together, and whch satsfy lutsky symmetry. There are many constrant condtons n the Dynamc AID model. uch case, the URE estmaton method s often used as a parameter estmaton method (Zellner, 1962). Therefore, ths method s also used n ths study. If these three restrctons are satsfed, Expendture and prce elastctes cannot be drectly accessed n (7), gven ts lnear-log form. Nevertheless, the elastctes can be retreved from coeffcents n (7), usng follows: Expendture elastcty: term term 1 (11) w j

7 Own-prce elastcty: term term term 1 (12) w Cross-prce elastcty: term term j term wj j w w (13) where, w : the sample s average share of destnaton n the base year, w j : the sample s average share of destnaton j n the base year. 3.3 Data The explanaton of data s descrbed as follow. For outbound toursm demand The data used n the outbound toursm analyss s shown n Table 1. The number of Japanese toursts traveled for each regon ndcates as a demand varable. It s assumed that three prce varables wrtten n Table 1 affect demand of Japanese outbound toursm, the toursm expendture of Japanese overseas toursts, the prces of commodtes n each regon, and exchange rate are used as varables of prce. The panel data of commodty prce s calculated by the mx of costumer prce ndex (tme-seres data) and prce level ndex (cross-secton data). Because of the data avalablty, the tme perod s decded as For your nformaton, these prce data aren t organzed by regonal level. Thus, these regonal data are replaced each representatve country (.e. North Amerca: UA, Europe: France, Asa: Korea and Oceana: Australa). In addton, the transportaton cost s out of the prce ndex n ths study. Its reasons are as follow. Frst of all, the changes of transport costs are ncluded n changes of commodty prce, and relatvely speakng, the proporton of transport cost s stable to total expendture. For example, the escalaton of gasolne prce affects global markets; therefore, the relatve gasolne prce wll reman unchanged. econdly, these transport data are not avalable from each country s statstcs. Incdentally, these hypotheszes have been employed by Durbarry and nclar (2003) etc. For nbound toursm demand The relatve prces data are common n n- and outbound analyss. Only toursm demand data n nbound analyss s dfferent from outbound study; the number of foregn toursts to Japan ( , source: Whte paper on Toursm) ndcates nbound demand. Because of model characterstcs, however, we should be careful that the nbound analyss based on AID model has two techncal problems. Frst of all, ths model should deal wth four consumers (.e. North Amerca, Europe, Asa and Oceana) deally. Nevertheless, the AID model assumes only one consumer. Thus, ths model has the theoretcal msmatch. econdly, the nbound case, the AID model cannot consder relatve prces except Japan, because ths model determnes only one demand (toursm demand to Japan). These two problems should be suggested an mprovement, but n ths study, we analyzed as the tral mplementaton whch remans these problems. The detaled future plan s shown n the fnal

8 secton.

9 / Prce Item Data Regon Table 1. Data st ource Perod Number of Japanese traveler North Amerca, Europe, Asa, Oceana *Except Oceana Whte paper on Toursm: Japanese mnstry of land, nfrastructure, transport and toursm. (except Oceana) *Oceana Australan bureau of statstcs HP Prce Consumer prce ndex (tme-seres data) Prce level ndex (cross-secton data) The yen exchange rate Japan, UA, France, Korea, Australa Japan, UA, France, Korea, Australa Japan, UA, France, Korea, Australa World statstcs and Internatonal statstcal drectory: Japanese bureau of statstcs World statstcs: Japanese bureau of statstcs *Except Korea The new Japan hstorcal statstcs lst: Japanese bureau of statstcs *Korea East Asa hstorcal economc statstcs, Vol.1 (Korea): Takushoku unversty Asan nformaton center World Bank HP EMPIRICA REUT 4.1 Results of Outbound Toursm Parameter estmaton The estmaton results of parameters are shown at Table 2. About half or more parameters are sgnfcant n cases at least at the 5% level. R 2 n the long-run Asa s relatvely hgh (0.5977), but the other regons show low scores. Thus, the future challenge s to mprove the goodness of ft of the data for the model. In addton, because the Durbn-Watson rato (DW) s not enough n the long-run model, the frst order seral correlaton about error terms may not be rejected. In other words, there exsts the error correlaton and the coeffcent determnaton may be estmated as excessvely-hgh. As shown n the table, the adjustment factor s Therefore, the adjustment perod to the long-run equlbrum (1/ ) s about 3.4 years.

10 ong-run Table 2. Estmated Parameter (Outbound) R 2 DW 1.North Amerca estmate E t-stat ** + ** ** 2.Europe estmate E t-stat 3.Asa estmate E t-stat * ** + * 4.Oceana estmate E t-stat ** ** hort-run R 2 DW 1.North Amerca estmate E t-stat ** 2.Europe estmate E t-stat + 3.Asa estmate E t-stat ** + 4.Oceana estmate E t-stat NOTE: 1) estmate: estmated parameter, E: standard error, t-stat: t-statstc. 2) R 2 : coeffcent of determnaton, DW: Durbn-Watson rato. 3) +, * and ** denote acceptance at the 10%, 5% and 1% sgnfcance levels respectvely.

11 Elastctes The effects of the dfferent varables on Japanese outbound toursm demand are ndcated by the elastcty values. The estmated values are shown n Table 3. Table 3. Expendture, Own-prce, and Cross-prce elastctes (Outbound) hort-run Prce Elastcty Expendture Destnaton Elastcty North Europe Asa Oceana Amerca North Amerca Europe Asa Oceana ong-run Destnaton Expendture Elastcty North Amerca Prce Elastcty Europe Asa Oceana North Amerca Europe Asa Oceana Expendture Elastcty The expendture elastcty s postve n all regons. It means the expanson of Japanese outbound toursts expendture push up toursm demands. In Europe and Asa, the elastcty score s hgher than 1 n short-run. It means 1% ncrease n Japanese toursts expendture gves rse to more than 1% ncrease Japanese toursts demand to these countres. Instead, about long-run, scores n these countes are lower than 1. It means 1% ncrease Japanese toursts expendture pushes up less than 1% nsgnfcant change. pecfcally, demands of Japanese toursts to Europe and Asa are greater gans n the short-term, but these effects break down n the long-run. We saw exactly the opposte n Oceana; the short-run elastcty s lower than 1, and hgher than 1 n long-run equlbrum. North Amerca shows dfferent trends; both elastctes are less than 1. It means the change of expendture has an nsgnfcant effect on the toursm demand to North Amerca. The forecastng of toursm demand change whch s caused by changes of toursts consumpton expendture (ex. decrease of GDP n Japan) s avalable by usng ths elastcty. In ths case, toursts to Europe and Asa wll be decreased n short-term. After that, the toursm demand for Oceana wll be decreased. Instead, demand for North Amerca wll be less subject to changng of expendture, and the robustness s stronger than other regon.

12 Own-prce Elastcty The own-prce elastcty whch s the dagonal value n the Tabe 3 s negatve n all regons. It means the ncrease of prce and exchange rate wth Japan wll decreases the Japanese toursts toursm demand. The nterpretaton of the elastcty s same wth expendture one. For example, a 1% ncrease n relatve prces of Europe results n a 1.002% decrease n Japanese demand for toursm n the short-run. But about long-run, the rate of decrease wll rebound to 0.442%. Asa wll be same trends wth Europe. mlar wth the result of expendture elastcty, Oceana wll be exactly dfferent trends wth Europe and Asa, and North Amerca s less subject to changng of the own-prce. These days, the number of Japanese who traveled abroad has been ncreasng the nfluence of the hgh-yen. From ths result, these prces change wll have a greater mpact for demand for Europe and Asa n short-run, but ths mpact wll be decreased n long-term. Cross-prce Elastcty The own-prce elastcty values are hgh relatve to those of the cross-prce elastcty, whch are the off-dagonal values n the Table 3. These gve the senstvty of demand for each destnaton to an ncrease n ts prces relatve to those of ts compettors. For example, n the long-run, the results ndcate that a 1% ncrease n Oceana prce results n a decrease of 0.966% n Japanese demand for North Amerca, an nsgnfcant change n demand for Europe, and an ncrease of 0.621% n demand for Asa. From the dfference of sgn of elastcty, n the short-run, the decrease n Oceana prce results decrease of Japanese toursm demand to North Amerca, but t ncrease of ts demand to Europe and Asa. In means Oceana-North Amerca has a gross-substtuton relatonshp, and Asa/Europe-Oceana has a gross-complementary (see Fgure 4). Ths relatonshp wll be changed n the long-run, almost cross-prce elastctes wll be mnus. It means the decrease of prce wll ncrease Japanese toursm demand to almost regon. However, only Oceana shows dfferent trends. The decrease of Oceana prce wll decrease Japanese toursm demand to Asa. There s a gross-complementary relatonshp between Asa and Oceana. Compare wth short- and long-run, the elastcty values n the long-run are hgher than short-run values. In means the changng prces of other regons wll ncrease year by year. In addton, some regons have dfferent sgn between short- and long-run. For example, between Asa and Oceana, there s the gross-complementary relatonshp (elastcty < 0) n short-run, but there s the gross-substtuton (elastcty > 0) n long-run. We should be careful that regonal relatonshp may change sgnfcantly.

13 North Amerca Prce Europe Prce Cross-prce elastcty ~0.1 Prce 0.1~ ~1.0 Asa 1.0~ ubsttuton-complementarty : Gross substtuton Prce Oceana : Gross complementarty Fgure 3. Interregonal substtuton-complementarty relatonshps (Outbound / hort-run). North Amerca Prce Europe Prce Cross-prce elastcty ~0.1 Prce 0.1~ ~1.0 Asa 1.0~ ubsttuton-complementarty : Gross substtuton Prce Oceana : Gross complementarty Fgure 4. Interregonal substtuton-complementarty relatonshps (Outbound / ong-run).

14 4.2 Results of Inbound Toursm Parameter estmaton The estmaton results of parameters are shown n Table 4. ame wth outbound analyss, there are some problems about the model accuracy, but we use these parameters to calculate elastctes as the tral mplementaton n ths study. The elaboraton of the model structure and selecton of varables are remaned as the future study. The adjustment perod to long-run equlbrum (1/ ) s about 42.7 years. Ths term s longer than outbound one (3.4 years).

15 ong-run Table 4. Estmated Parameter (Inbound) R 2 DW 1.North Amerca estmate E t-stat ** ** ** ** * 2.Europe estmate E t-stat 3.Asa estmate E t-stat ** ** ** 4.Oceana estmate E t-stat hort-run R 2 DW 1.North Amerca estmate E t-stat ** 2.Europe estmate E t-stat 3.Asa estmate E t-stat ** 4.Oceana estmate E t-stat NOTE: 1) estmate: estmated parameter, E: standard error, t-stat: t-statstc. 2) R 2 : coeffcent of determnaton, DW: Durbn-Watson rato. 3) +, * and ** denote acceptance at the 10%, 5% and 1% sgnfcance levels respectvely.

16 Elastctes ame wth outbound case, the effects of the dfferent varables on foregn toursts demand to Japan are ndcated by the elastcty values (as shown n Table 5). Table 5. Expendture, Own-prce, and Cross-prce elastctes (Inbound) hort-run Prce Elastcty Expendture Orgn Elastcty North Europe Asa Oceana Amerca North Amerca Europe Asa Oceana Orgn Expendture Elastcty North Amerca ong-run Prce Elastcty Europe Asa Oceana North Amerca Europe Asa Oceana Expendture Elastcty The expendture elastcty values are postve n all regons. It means the ncrease n expendture of foregn toursts to Japan results ncrease n each cty s toursm demand to Japan. Especally n Asa, the demand to Japan s the elastc whenever (elastcty > 1). It means that the expanson of Asan toursts expendture wll have bg mpact to ncrease toursm demand to Japan. Because of the recently economc growth n Asan countres, foregn toursts expendture wll be ncreased. Its growth may expand the toursm demand to Japan. In Europe and Oceana, the mpact of ncrease n expendture each regon s nsgnfcant n short-term, but sgnfcant n long-run. About North Amerca, the mpact of expendture changng s less than other regons. Own-prce Elastcty The own-prce elastcty values are negatve n all regons. However, compare wth short- and long-run, the trend s dfferent between Asa and other ctes. Asan demand s prce nelastc n short-run, but t changes to prce elastc n long-run. It shows that Asan demand s affected further by ncrease n relatve prce as the equlbrum nears. Other regons are smlar trend n short-term, but ncrease n relatve prce results nsgnfcant effects on demands n long-run.

17 For example, f the trend of hgh-yen contnues n the future, the trend of travel demand to Japan s unlkely qute dfferent by regon n short-run, but n long-run, Asan toursts demand may be decreased. Cross-prce Elastcty As the general trend, the cross-prce elastcty values are almost zero n short-run, but these scores wll ncrease wth tme. It s smlar trend wth outbound analyss. However, short-run Asan elastcty s dfferent from other regons. Asan toursm demand to Japan s reslent for relatve prce change n Oceana (-1.333). Ths value s hgher than Asan own-prce elastcty value (-0.980), and there are strong gross-complementary relatonshp. But n the long-run, almost regon wll be gross-complementarty (see Fgure 5 and 6). North Amerca Prce Europe Prce Cross-prce elastcty ~0.1 Prce 0.1~ ~1.0 Asa 1.0~ ubsttuton-complementarty : Gross substtuton Prce Oceana : Gross complementarty Fgure 5. Interregonal substtuton-complementarty relatonshps (Inbound / hort-run).

18 North Amerca Prce Europe Prce Cross-prce elastcty ~0.1 Prce 0.1~ ~1.0 Asa 1.0~ ubsttuton-complementarty : Gross substtuton Prce Oceana : Gross complementarty Fgure 6. Interregonal substtuton-complementarty relatonshps (Inbound / ong-run). 5. CONCUION AND FUTURE TUDY 5.1 Concluson The toursm demand structure s unque n each regon. Therefore, t s very mportant for us to make toursm polces by consderng toursm demand structure n each regon. In ths study, the Japanese demand for toursm n the world and foregn toursts demand for Japan have been examned usng both the long-run statc and the short-run Dynamc AID model. Ths study wll provde some basc nformaton to consder how to promote nternatonal toursm. We have some suggeston as the possblty of future development for polcy analyss. Frst of all, based on ths model, we can estmate changes of the toursm demand whch s affected by economc factors (ex. contracton of GDP n Japan, contnung strong yen, economc growth n foregn countres etc.). It helps us to be the proactve approach to promote toursts or control of a declne n toursts. In addton, we can consder the tmelne by usng ths model. It means that we don t calculate elastctes only n long-run equlbrum poston, but also adjustment process to equlbrum. We should consder polces whch adapted to each perod. econdly, ths result s developed as not only external polces (ex. concentraton on the regon should do aggressve sales actvtes, control of a declne n tourst, etc.) but also domestc polces. For example, ths study wll provde us the basc nformaton to consder the poston to receve foregn toursts. Thrdly, as prevously explaned, the nternatonal toursm demand s affected by prce change not only n home regon and partner, but also thrd regon. To estmate more detaled future toursm demand, we should check the substtute and complementary relatonshp between each regon, and smulate effects n case the prce change s occurred n one regon. Fnally, we d lke to show the applcaton of ths study for polcy analyss. Nowadays,

19 the development of nbound toursm promotes the gvng of ncentves for Japanese economy rather than outbound one. Thus, ths here takes nbound toursm as an example of the applcaton for polcy analyss. From the result of nbound analyss, the Asan ncome growth wll promote toursm demand to Japan n the short-run. Therefore, Japan should be targeted at gatherng Asan toursts n the short term. However, the combnatons of almost regons wll be gross-complementary relatonshp n the long-run. It means that the decrease of relatve prce wll ncrease toursm demand n all regons. Thus, Japan should plan to meet the expected wde demand from across the world n the long-run. 5.2 Future tudy On the other hands, there stll remans future works to mprove ths study. Frst of all, some statstcs of model (t-statstcs, DW-rato and R 2 ) are statstcally-unwarranted; explanatory varables should be revew. econdly, we can understand the correlaton between objectve varable and explanatory varable n AID model. However, we cannot understand the cause and effect relatonshp between these varables. We should be careful n the nterpretaton of study. Thrdly, n ths study, the whole world s dvded nto four regons because of data lmtaton. But ths s qute macroscopc analyss for detaled polcy makng, so future, when performng detaled polcy makng, the analyss whch deal wth smaller zone s requred. In addton, as we mentoned prevous sector, the nbound analyss has a problem of consstency wth AID model. Because of data avalablty we carred out tral calculatons n defance of the problem, the model structure should be revew n future study. Fnally, Because of data lmtaton, the toursm demand structure s estmated by pooled data whch contaned all-purpose oversea trp. However, the demand structure may be dfferent by regon. For example, the prce elastcty may be qute dfferent between sghtseeng and busness purposes. We have no data about purpose of trp n outbound toursm, but we can get purpose of trp data n each regon about nbound from the mmgraton statstcs. From ths, as a rato of toursts (sghtseeng purpose) to the total vstor to Japan s varablty among regon lke; Asa: 80%, Europe: 61%, North Amerca: 50% and Oceana: 70%. To elaborate ths model, the dsaggregaton of trp purpose wll be essental. REFERENCE Japanese mnstry of land, nfrastructure, transport and toursm ( ) Whte paper on Toursm. (n Japanese) oeb, P.D. (1982) Internatonal travel to the Unted tates: an econometrc evaluaton, Annals of Toursm Research, 9, Uysal, M. and Crompton, J. (1984) Determnants of demand for nternatonal toursm flows to Turkey, Toursm Management, 5, ong, H., Romlly, P. and u, X. (2000) An emprcal study of outbound toursm demand n UK, Appled Economcs, 32, Durbarry, R., nclear, M. T. (2003) Market shares analyss -The case of French toursm demand-, Annals of toursm research, 30(4), Blundell, R. and Brownng, M. (1994) Consumer demand and the lfe-cycle allocaton of household expendtures, Revew of Economc tudes, 61, Eakns, J. M. and Gallagher (2003) Dynamc almost deal demand systems: An emprcal analyss of alcohol expendture n Ireland, Appled Economcs, 35, Choo,., ee, T. and Mokhtaran, P.. (2007) Do transportaton and communcatons tend

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