IMF Working Papers

Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism

By Serhan Cevik

March 17, 2023

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Serhan Cevik. Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism, (USA: International Monetary Fund, 2023) accessed December 22, 2024

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Summary

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.

Keywords: Gravity model, Infectious diseases, Out-of-sample forecasting, Predictability, Tourism flows

Publication Details

  • Pages:

    18

  • Volume:

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  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2023/070

  • Stock No:

    WPIEA2023070

  • ISBN:

    9798400238321

  • ISSN:

    1018-5941