INBOUND VS OUTBOUND PRICE ELASTICITIES
One further adjustment that may need to be applied to the price elasticity estimates in table 1 is for the case when the passenger flow of concern is inbound or outbound, not the total or average impact. This will be of particular importance when considering the impact on inbound tourism of, for example, a national passenger tax. It also matters when considering the diversion of inbound passengers and consequent reduction of effectiveness of a national or regional environmental tax.
The price elasticity estimates in table 1 are all averages of outbound and inbound passengers. Most databases of passenger numbers and fares do not distinguish between domestic residents travelling overseas then returning, and overseas residents visiting and then returning home. However, their sensitivity to travel prices including taxes will differ.
These estimates will be verified by future research. Meanwhile a reasonable rule-of-thumb multiplier to adjust the price elasticities in table 1 is as f