Robertico R. Croes

Cointegration and Causality between Tourism and Poverty Reduction

This study, using cointegration and causality tests, investigates the relationship among tourism development, economic expansion, and poverty reduction in Nicaragua. The results indicate a long-run stable relationship among the three. The causality tests suggest a one-way Granger causal relation between tourism development and economic expansion, and between tourism and poverty reduction, and a bidirectional causal relation between economic expansion and poverty. The nexus of tourism, economic expansion, and poverty reduction is established in the Nicaraguan economy. This result is supported by testing the sensitivity of the Granger causality test under different lag selections along the optimal lag. The empirical evidence points to the potential economic muscle of tourism to seriously tackle Nicaraguan poverty at scale through helping both Nicaraguas public and private sectors allocate resources to tourism development, resulting in the overall improvement of the economy.

Measuring and Explaining Competitiveness in the Context of Small Island Destinations

This study measures and explains competitiveness among small island destinations. Current measures of competitiveness do not respond to the special needs of small island destinations. An alternative measurement suggests a more suitable Tourism Competitiveness Index (TCI), and through the application of panel regression analysis, tracks the most important factors affecting competitiveness among island destinations. The findings imply likelihood that more expensive destinations obtain a larger share of regional tourism revenues. The study concludes that providing a high-quality product may allow destinations to become and remain competitive.

Assessing Tourism Development from Sen’s Capability Approach

The purpose of this study is to assess tourism development in the context of Sen’s capability approach. The study developed a model to investigate the relationship between tourism development and human development while focusing on two countries, Nicaragua and Costa Rica. The study applied a cointegration technique based on the Granger representation theorem. Overall, tourism development and human development reveals a tenuous relationship in both cases, reflecting some threshold effect. The importance of tourism growth is merited in the distribution of its benefits and the extent that tourism receipts are allocated to support human development (public health, education, safety, etc.). Rising incomes will not necessarily translate into human development performance, thereby rendering support to Sen’s contention that well-being should not be measured by its instrumental antecedents (such as income) alone. Private incomes through tourism expansion seem to matter most at lower levels of human development.

The Tourism Development–Quality of Life Nexus in a Small Island Destination:

Tourism development (TD) and quality of life (QoL) have been studied mostly from the perspective of how TD affects QoL, but the inverse relationship is less widely researched. Understanding this interrelationship will broaden the definition and goals of development, and will help shifting the debate from an income perspective to a QoL standpoint. This study assesses the linkages between TD, QoL, and economic growth for the island of Aruba. The study contributes to the literature by improving the understanding of the nature of the relationship between TD and QoL, by advancing the theory-building process. The methodology involves multivariate cointegration analyses and Granger causality testing. The results confirm the two-way direct relationship between TD and QoL, with proactive roles for both direct and indirect relationships. The findings highlight the need for recognizing the importance of QoL in determining TD, and understanding the workings of TD and economic growth on QoL dimensions.

Research report: Evaluating short-term tourism economic effects in confined economies - conceptual and empirical considerations

Given the necessary involvement of government with the tourism product, accountability for governments expenditures of tax dollars is of increasing importance. This paper discusses the literature for three types of analyses that governments can use to ascertain the effectiveness of their spending of tax dollars to promote a tourism destination. The shortcomings and benefits for each method are discussed. Conclusions based on the type of method chosen require that the user understand the specific context, time horizon and their need for the study. For the case study presented in this paper, the context of a confined area, the time horizon of short-term and the need of finding out the economic impact of tourism for Kissimmee/ St Cloud, the I–O/SAM method is deemed optimal. A case study of Kissimmee/St Cloud, along with the results of the economic impact, is presented. Results of the study show that taxpayers are receiving a substantial return on their tax investment for the tax dollars spent.

The Value of Destination Loyalty: Myth or Reality?

Given the growing appeal of the concept of destination loyalty in tourism marketing, it is highly important to investigate the travel expenditures of loyal vs. non- or less loyal visitors. Adopting the behavioral approach to loyalty, this study examines the spending patterns of visitors to Kissimmee-St. Cloud, while comparing between the different loyalty segments: no previous visit, one previous visit, and multiple visits. The analysis is based on an intercept survey conducted by the Kissimmee-St. Cloud Convention and Visitors Bureau* (KSCVB, 2006), which yielded a sample of 4,301 visitors. In contrast to the prevalent concept, the results show that first timers spend more than the more loyal segments, both in per-trip and per-day total expenditures. However, the loyalty segments are distinguished in their spending patterns at the destination, when first timers spend more on lodging, food and restaurants, and car rental, and the those with one or more previous visits spend more on gasoline, activities and entertainment, and shopping. The paper ends with an assessment of the contribution of the findings both to the literature on loyalty and to tourism destination marketers.

Testing the empirical link between tourism and competitiveness: evidence from Puerto Rico

This study examines the empirical relationship between tourism and the competitiveness of a destination. It uses the cointegration and error correction model (ECM) in a bivariate context as a precondition to apply the Granger causality test. This procedure was carried out in the case of Puerto Ricos tourism industry during 1960–2004. The study found cointegration in the intertemporal rather than the contemporaneous effects, as well as a one-directional causality running from changes in tourism spending to changes in competitiveness. This result highlights the long-run equilibrium spending behaviour of tourists as a major concern of destination managers.

The role of tourism in poverty reduction: An empirical assessment

This paper assesses how tourism affects absolute poverty beyond its effects on growth in two developing countries. In particular, the author explores whether tourism spending leads to a decline in the proportion of people below the poverty line. An error correction model is applied to estimate the relationship between poverty and tourism spending. The results reveal that tourism does matter for the poor, but that it does not appear to have systematic effects, and that tourism development matters most for the poor at the lower levels of economic development. The findings from the two developing country case studies show differing impacts of tourism development, and thus the policy implications differ for each case.

Tourism’s potential to benefit the poor: A social accounting matrix model applied to Ecuador

The study examines the distributional effects of tourism expansion applying a social accounting matrix model to the case of Ecuador. Specifically the study examines what share of tourism expansion benefits poor people. The study finds that tourism has large multiplier effects on the Ecuadorian economy and has the potential for substantial benefits to the poor. The study also found that distributional effects of tourism development are spread across all household incomes in both urban and rural areas benefiting the lowest and low households the most. Tourism has the potential of reducing inequality and is pro-poor in the case of Ecuador. Benefits to the poor seem to hinge on how and where tourists spend their money.

The Relevance of Cultural Tourism as the Next Frontier for Small Island Destinations

The purpose of this study is to apply the cultural tourism typology of McKercher and to estimate the economic relevance of cultural tourism to the context of a small island destination tourist market. Small island destinations may be confronted with environmental constraints that restrain the traditional small island tourism development model, which is based on sun, sand, and sea. The cultural tourism typology is used in order to determine whether the typology may be used to segment tourists thereby allowing researchers to determine the economic impact of different cultural tourist segments. This study draws attention to some of the foundational issues that researchers face when attempting to quantify the economic impact of cultural tourists. The results of the study indicate that McKercher’s typology may provide more refined results when incorporating the purpose of a trip; and, that cultural tourists may be a lucrative market for destinations to pursue given the results of an economic input–output model.