Effective exchange rate volatility and its effect on tourism demand in India: a cointegration analysis

Arun Bhatia; Kamal Singh; Vinod Naik

doi:10.5281/zenodo.11187707

Authors

Arun Bhatia Assistant Professor in Department of Travel and Tourism, Central University of Himachal Pradesh, Dist. Kangra https://orcid.org/0000-0003-3464-6128
Kamal Singh Assistant Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, District Kangra https://orcid.org/0000-0001-7407-7527
Vinod Naik Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, Dist. Kangra https://orcid.org/0000-0002-4715-7684

DOI:

https://doi.org/10.5281/zenodo.11187707

Keywords:

Tourism, Foreign Exchange rate, Domestic prices, Investment

Abstract

Tourism has played a dominant role in the economy of the country since ancient times. Demand for tourism at the destination is a function of multiple variables like the level of domestic prices, the income of the tourists, foreign exchange rate, international price levels, cost of travel, etc. The relationship between effective exchange rates and foreign tourist arrivals in India is examined in the present study based on time series data of more than two decades. The results highlight that there exists a causal relationship between the exchange rate and foreign tourist arrivals in India. Further, if we wish to attract higher tourist footfall in the country, then along with increasing the level of investment in the tourism sector, policymakers need to manage the level of domestic prices in the country.

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Author Biographies

Arun Bhatia, Assistant Professor in Department of Travel and Tourism, Central University of Himachal Pradesh, Dist. Kangra

PhD in Tourism Studies (2020). Master of Business Administration (2013). Masters in Tourism Administration (2006, Gold Medalist). Assistant Professor in Department of Travel and Tourism, Central University of Himachal Pradesh, Dist. Kangra.

Kamal Singh, Assistant Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, District Kangra

PhD in Economics (2020). Master of Arts in Economics (2007). Assistant Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, District Kangra.

Vinod Naik, Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, Dist. Kangra

Ph D in Agricultural Economics (2013), Master of Science in Agricultural Economics (2010). Assistant Professor in Department of Economics, Central University of Himachal Pradesh, Dehra, Dist. Kangra.

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