An econometric model of demand for tourism in Nepal

A number o factors such as snowy mountains; landscape, and cultural monuments are the main attractions to the visitors to Nepal. Tourism is one of the major contributors to foreign currency receipts in Nepal. Both the number of visitors and of hotel beds are increasing; however, the increase in the former is less than that of the latter.;This thesis is a study of demand determinants of Nepalese tourism. The tourist flow from 14 major source countries is used in the study. The period examined is 1974-1991 and variables used include GDP per capita in constant 1985 US dollars, population of the source countries, air distance between one major city in each source country and Kathmandu, airfare in US dollars from Kathmandu to each source country's main airport, relative exchange rates between each source country and Nepal, and the consumer price index in constant 1980 prices. The log linear model is selected for the study after a comparison with the linear model. The regression analysis is carried out using generalized least squares for panel data and the White covariance consistence matrix procedure for individual cross-section and time series. A specific model for each individual country is examined.;The results indicate that all the variables considered are important determinants of tourism demand in Nepal.