The purpose of the paper is to present the fundamental equation in tourism finance that connects tourism research to empirical finance and financial econometrics. The energy industry, which includes, oil, gas and bio-energy fuels, together with the tourism industry, are two of the most important industries in the world today in terms of employment and generating income. The primary purpose in attracting domestic and international tourists to a country, region or city is to maximize tourism expenditure. The paper will concentrate on daily tourism expenditure, regardless of whether such data might be readily available. If such data are not available, a practical method is presented to calculate the appropriate data.

Additional Metadata
Keywords tourism research, tourism finance, growth in tourism, returns on tourism, volatility, fundamental equation, empirical finance, financial econometrics
JEL Time-Series Models; Dynamic Quantile Regressions (jel C22), Time-Series Models; Dynamic Quantile Regressions (jel C32), Financial Econometrics (jel C58), Financing Policy; Capital and Ownership Structure (jel G32)
Persistent URL
Series Econometric Institute Research Papers
Note The author is most grateful to Chialin Chang and Teo Jasic for insightful discussions. For financial support, the author wishes to thank the Australian Research Council and the National Science Council of Taiwan.
McAleer, M.J. (2015). The Fundamental Equation in Tourism Finance (No. EI2015-35). Econometric Institute Research Papers. Retrieved from