Tourism Forecasting: The General-to-Specific Approach

Abstract

The general-to-specific approach to econometric modeling and forecasting has a clear strategy in model specification, estimation, and selection and is demonstrated in the context of international tourism demand. A general autoregressive distributed lag model is reduced to various specific models by imposing parameter restrictions, and model selection is based on restriction tests, consistency with economic theory, and diagnostic statistics. The models are estimated using data on inbound tourism to South Korea from its four major generating countries: Germany, Japan, the United Kingdom, and the United States. Statistical tests show that a unique model specification across origin countries is not appropriate.