The Determinants of the Jordanian Tourism Income: Econometric Study over the Period (1975-2005)

Hanem Ragab Al-Darwesh, Ahmad Ibrahim Ibrahim Malawi

Abstract


This study aims to investigate the determinants of the Jordanian tourism income over the period (1975-2005). A reduced-form fifth-variable VAR model (the variables: number of tourists, tourism income, expenditures on tourism, the real exchange rate, and inflation rate) is utilized. Dickey-Fuller tests showed that the variables are stationary in all levels.
Various tests have been utilized such as: the Granger- Causality showing to determine the direction of causality among the variables; a bidirectional causality relationship between tourism income and all the other variable; Also, the Cointegration test showed the existence of a long-run relationship among the variables; Two major tools were used for analysis: the Variance Decomposition and the impulse response function. It is found that the results support the hypotheses of this study, in the sense that, the real exchange rate of the Jordanian Dinar against the U.S Dollar and the inflation rate have negative impacts on tourism income, but the number of tourists and tourism expenditure were found to have positive impacts on the tourism income.

Keywords


Jordanian Economy, Tourism Income, Vector Autoregression (VAR) Model.

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