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1 Econometrics. Ekonometria. Advances in Applied Data Analytics

1 2014

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Determinants of tourism demand in Greece: a panel data approach

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Agiomirgianakis G. M. , Sfakianakis G.

Econometrics. Ekonometria. Advances in Applied Data Analytics

2014

nr 1(43)

15-26

This paper aims at investigating the determinants of tourism demand in Greece over eight years (2004-2011). Tourism is the main industry of Greece as its share in the Greek economy varies from 15% to 20% of GDP whether measured directly or indirectly respectively. We opted for a macroeconometric approach and, in particular, building on the existing literature we used panel data estimation techniques with disaggregated data on the country (or area) of origin combined with macroeconomic aggregates, indicators and (relative) price indices. The specific econometric techniques used take into account both the statistical properties of variables and the differences between the various cross sections. The main conclusion of the paper is that the macroeconometric panel data approach to explaining tourist receipts provides a rather satisfactory model fit, with explanatory variables explaining a significant part of the variability of the dependent variable. Our findings also suggest that certain policy directions identified by Greek governments (both in the present and past), such as enhancing competitiveness and the outward orientation of the economy, may indeed affect positively the prospects of the Greek tourism sector.