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Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism
Author:
Mr. Serhan Cevik
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https://orcid.org/0000-0002-2373-2023
Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 070
Language:
English
Publication Date:
17 Mar 2023
DOI:
https://doi.org/10.5089/9798400238321.001
ISBN:
9798400238321
ISSN:
1018-5941
Pages:
18
Keywords:
Infectious diseases; tourism flows; gravity model; predictability; out-of-sample forecasting; out-of-sample prediction model; forecasting performance; tourism flow; infectious-disease episode; Tourism; Gravity models; Communicable diseases
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses an augmented gravity model framework to investigate the historical impact of infectious diseases on international tourism and develops an out-of-sample prediction model. Using bilateral tourism flows among 38,184 pairs of countries during the period 1995–2017, I compare the forecasting performance of alternative specifications and estimation methods. These computations confirm the statistical and economic significance of infectious-disease episodes in forecasting international tourism flows. Including infectious diseases in the model improves forecast accuracy by an average of 4.5 percent and as much as 7 percent relative to the standard gravity model. The magnitude of these effects, however, is likely to be much greater in the case of COVID-19, which is a highly contagious virus that has spread fast throughout populations across the world.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund