Tourism, Security and Safety From Theory to Practice

Table 3
Own-Price Demand Elasticities in Local and Foreign Markets, by Season, 1987–1999
Local Market
Foreign Market
No. of Bed
No. of Bed
Season
Price
Nights
Elasticity
Price
Nights
Elasticity
S
1
88.1
421.6
−
0.90
62.3
769.0
−
1.80
S
2
77.8
565.5
−
0.59
64.4
641.4
−
2.24
S
3
70.0
932.0
−
0.32
62.7
645.6
−
2.16
S
4
79.9
584.2
−
0.59
60.5
658.0
−
2.05
S
5
87.6
416.5
−
0.90
56.0
749.3
−
1.66
S
6
84.9
386.8
−
0.94
57.7
551.1
−
2.33
Table 2
Supply and Demand Elasticities in Foreign and Local Markets, Israel, 1987–1999
PL
t
s
PF
t
s
QL
t
d
QF
t
d
PL
t
−
1
0.04
QL
t
−
0.17
QF
t
0.10
0.17
QT
t
0.05
W
t
0.57
0.23
PF
t
−
1
0.61
PL
t
−
0.63
GNPL
t
1.3
SCL
t
1.0
PF
t
−
2.0
GNPF
t
0.035
SCF
t
−
2.5
Note:
Elasticities are calculated at sample mean.
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ter, peaks quickly in the spring (March through June), then declines gradually
through the rest of the year.
Finally, and as anticipated, the effect of the terrorism index is negative: the more
severe the war or terror climate, the lower the international visitor demand. A two-
standard-deviation (four-unit) increase in the terror index reduces foreign demand
quantity by 49,600 bed nights per month, a 7.5% drop from sample mean. The
interval between terror event and this demand shortfall is important. We examined
every lag length from 0 to 6 months; only the 2-month lag length was statistically
significant. Interestingly, Krakover (2000) obtained the identical result in his
examination of a much longer time series. It appears difficult for tourists to react
on much shorter notice than 2 months, while over a longer period an event’s psy-
chological effect appears to subside.