Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA

Abstract

This paper aims to investigate the effects of economic uncertainty on the Japanese tourists who travelled to the United States (USA) over the period 1996Q1-2015Q1. To achieve this aim, for the first time the Economic Policy Uncertainty index has been used as an independent variable in international tourism demand analysis models. The unit root and the cointegration tests have been applied to account for unknown structural breaks. Empirical findings indicate that one standard deviation increase in the Economic Policy Uncertainty index leads to a 4.7% decrease in the number of Japanese tourist arrivals to the USA in the long run.