4. Conclusion
The dramatic growth in tourism over the past several decades has led to an extensive literature
which seeks to quantify the effect of income and prices on tourist flows. Although estimates of demand
elasticities are central to marketing, forecasting and policy work, the literature on tourism demand
has produced a range of elasticity estimates that are occasionally at odds with economic theory
and reduce their usefulness in decision making. To improve the precision of estimates, it is natural to
turn to the richness of panel data exhibiting variation in both the temporal and the cross-sectional
dimension. This point has also been realized by scholars in the tourism literature, and as econometric
tools have advanced, a trend to exploit the greater information content of panel data has emerged.
However, panel estimation using non-stationary data requires careful attention to the likely presence
of common shocks in the underlying macroeconomic variables.