Research On China's Inbound Tourism Demand Based On Panel Cointegration Model

At present,a research focus in the field of international tourism demand forecasting is the treatment and introduction of exchange rate and price variables(commonly used relative price and alternative price).How to deal with these two variables will improve the accuracy and applicability of model prediction and become a controversial issue for scholars.Therefore,based on this point of view,based on the relevant panel statistics of 15 major inbound countries in China,the panel model of China's inbound tourism demand is constructed,at the same time,in order to eliminate the simultaneous effect of exchange rate and price,and to discuss how to introduce and deal with the price and exchange rate to improve the interpretation of the prediction model.Three methods are introduced to deal with these two variables,to try to solve the current debate in this field,and to further explore the impact of the factors on China's inbound tourism demand.Study findings suggest that the inclusion of exchange rates and prices,as mutually exclusive components,can be misleading when included in models one at a time or independently,are not significant,while relative and substitute price standardized by relevant exchange rate seem significant in our sample.Fundamentally,separating the effect of exchange rates and prices can be misleading,if the difference in inflation rates is offset by exchange rates and vice versa.The FMOLS group-mean-estimator is a practical tool that can be used in non-stationary panels to provide coefficient estimates for each panel member.This study compares the pooled FMOLS estimator with the FMOLS group-mean-estimator.While the pooled FMOLS estimator assumes the panel members are homogeneous and produce a single coefficient for the members of the panel,the FMOLS group-mean-estimator assumes the panel members have different characteristics and produces coefficients for each panel member that can be used to make inferences for both the long and short-run.The income level of the country of origin and the degree of trade openness between countries will have a significant positive impact on the inbound tourism demand,while the relative price and the alternative price will have a significant negative impact on China's inbound tourism demand.At the same time,through the analysis of the virtual variables,further proved that the sensitivity and vulnerability of the tourism industry,the sudden crisis will bring significant negative impact on China's inbound tourism,such as the International Olympic Games,World Expo and other activities can effectively stimulate the growth of China's inbound tourism,reduce the negative effects of the crisis event.