Analysing tourists’ arrivals from the US to Taiwan for various purposes

Abstract

Faced with the many diverse products supplied by modern tourism agents, it is important to understand the differences among tourists’ demands, based on their different travelling purposes. This paper tries to sort US tourists by their purposes for which they came to Taiwan and to understand how economic factors affect US tourists’ decisions to travel. For the long-term analysis, Johansen’s cointegration test is used to discern if a long-term relationship exists. To conduct a short-term analysis, this paper employs vector autoregression to estimate the responses of US tourists for specific purposes to the shocks of changes in gross national income, cost of living and substitute price. The short-term equilibrium adjustment processes are discussed in terms of generalised impulse responses.