An Analysis of the Tourism Demand in the Dominican Republic From 2001 to 2021

Abstract

In this study, we estimate the tourism demand elasticities model by income and prices in the Dominican Republic from the top ten leading countries in tourism, from the first quarter of 2001 to the last quarter of 2021. The tourism demand is measured by tourist arrivals, tourism prices, the source country’s real GDP, tourism price in the substitute destination ─Mexico─ and structural breaks; the model are estimated jointly and separately for the primary source countries using the dynamic common correlated effect estimator and the Autoregressive-Distributed Lag (ARDL) bound testing approach to cointegration in the presence of structural breaks. We found that the demand for the Dominican Republic’s tourism is income elastic and price inelastic for the top ten countries.