Modelling Domestic Tourism Demand for Ghana

Abstract

The research analyses the demand for tourism goods and services in Ghana by domestic tourists. For this purpose, it uses the Linear Almost Ideal Demand System (LAIDS) model (static and dynamic) to estimate price and expenditure/income elasticities for the study. The tourism goods and services include: accommodation; food and drinks; transport; recreation, culture and sporting activities; shopping; and other services. The uncompensated and compensated price and expenditure/income elasticities were calculated from the estimated parameters of the LAIDS model, static and dynamic. The results show that all own-price elasticities are negative and significant for uncompensated and compensated elasticities, while expenditure/income elasticities are positive and significant. The findings show that, by short-run, the demand for tourism goods and services in Ghana is price inelastic and expenditure/income elastic, and are normal goods and services.

KEY WORDS: Static, dynamic, uncompensated, compensated, AIDS, elasticity.

DOI: 10.7176/JTHS/40-09