ECONOMETRIC ANALYSIS FOR TOURISM DEMAND FUNCTION IN EGYPT A DYNAMIC PANEL DATA APPROACH

In this paper, the author investigates the tourism demand function using the dynamic panel data approach in the case of Egypt. The panel data set covers the time period between 1995 and 2014. The individuals are 49 countries as origin countries for tourists, representing 92% of the total tourist arrivals to Egypt. Explanatory variables which affect the tourism demand function were taken into account: lag of dependent variable that leads to dynamic panel data approach, using DIFF-GMM estimator proposed by Arellano and Bond (1991); also, many other explanatory variables like GDP per capita, relative price index, distance, and dummy variable which represent the political situation. One of the important and significant conclusions of the paper is the significant effect of the lagged dependent variable (0.493), which may be explained as “Word of Mouth” to tourists’ decision when choosing the destination