Exploring the Relationship of the Aggregate Impact of the Factors Affecting Tourist Arrivals through Panel Data Analysis

Abstract

This study employs a two-way random effects panel data analysis to explore the relationship between the factors affecting tourist arrivals across 22 Asian countries from 2017 to 2022. The investigation focuses on three key independent variables: Consumer Price of Tourism (CPT), which is proxied by consumer price index, Political Stability and Absence of Violence/Terrorism (PS), and Air Pollution (AP), with tourist arrivals as the dependent variable. The research assesses the hypotheses that consumer price of tourism is inversely related to tourist arrivals, political stability and absence of violence/terrorism has a positive relationship with tourist arrivals, and air pollution has a negative relationship with tourist arrivals. The results reveal a statistically significant model fit (P-value(F) = 7.97e-41), with an overall decrease in tourist arrivals when holding CPT, PS, and AP constant. Specifically, an increase in CPT, PS, AP positively influences tourist arrivals. Notably, certain countries exhibit no significant impact from changes in these variables. Policy recommendations are tailored to address the unique relationship uncovered by the study, offering insights for governments and stakeholders to optimize the tourism sector in the selected Asian countries.