Modelling International Tourism Demand and Uncertainty in Maldives and Seychelles: A Portfolio Approach

Maldives and Seychelles in the Indian Ocean are small island tourism economies (SITEs), both of which have relatively small populations, territorial sizes, land area and narrow productive bases. The two SITEs are surrounded by vast ocean and have an overwhelming reliance on international tourism for economic development. Variations in international tourist arrivals to these 2 SITEs have been affected by unanticipated oil shocks, natural disasters, crime and global terrorism, among others. An accurate assessment of the variations in international tourist arrivals, particularly the conditional volatility, is essential for policy and marketing purposes. The conditional mean and conditional variance of the weekly international tourist arrivals to Maldives and Seychelles from 1 January 1994 to 31 December 2003 for the 5 main tourist source countries are modelled. Multivariate models of uncertainty are estimated and tested. An assessment and interpretation of the estimates are made for policy makers and tour operators to reach optimal decisions on the basis of a portfolio approach to international tourism demand. The paper assesses 4 sets of country spillover effects between Maldives and Seychelles, namely: (i) the own country effects for Maldives and Seychelles; (ii) the country spillover effects from the remaining four countries within each of Maldives and Seychelles; (iii) the own country spillover effects between Maldives and Seychelles; and (iv) the cross-country spillover effects between Maldives and Seychelles. The empirical results for both Maldives and Seychelles are discussed in terms of each of these components.Small island tourism economies, Weekly international tourist arrivals, Uncertainty, Conditional volatility, Country spillover effects Acknowledgements: The first author wishes to acknowledge the financial support of the School of Accounting, Finance and Economics, Edith Cowan University. The second author is most grateful for the financial support of the Australian Research Council.

An aggregate import demand function for Australia: a cointegration approach

This paper investigates the relationship among quantity of imports, relative import prices and real GDP in the aggregate import demand function for Australia during the period 1959Q3Ã’2006Q3. Testing for cointegration, we find these variables are not stationary but are cointegrated. The results are consistent across three different cointegration tests conducted, namely the Engle-GrangerÃŒs residual-based test, the Johansen and Juselius multivariate test and the Bounds Test. As only one cointegration vector is found, there is a unique long-run equilibrium relationship among the variables. In the long-run, the price elasticity is found to be close to unity and import demand is found to be fairly income elastic. The error correction model is used to investigate the dynamic behaviour of import demand. In the short-run, Australian import demand is both price and income inelastic. Price is more elastic than income in the short-run, indicating that it is the dominant determinant of Australian import demand in the short-run. Furthermore, the estimated error correction coefficient of 0.3090 suggests that the aggregated Australian import demand corrects from the previous periodÃŒs disequilibrium by 31% per quarter. That is, it takes approximately 10 months to fully realign any disequilibrium that occurs. This study provides the only assessment of Australian import demand including a precise estimate for the short-run relationship, especially an estimate of the short-run adjustment term. This information will provide further input to support policy decisions relating to the management of the Australian trade balance.Import demand, Cointegration, Error correction model Acknowledgements: The first author would like to acknowledge financial assistance from the School of Accounting, Finance and Economics at Edith Cowan University, Western Australia.

Country Risk Ratings of Small Island Tourism Economies

Over the last twenty years, there has been a growing fascination within public and academic circles about the livelihood of islands with small populations and territory which are present in each of the world’s great oceans. The Small Island Tourism Economies analysed in this paper vary profoundly in their size, land area, and location. Moreover, they have depended heavily on financial aid from their former colonists for infrastructure development, which has declined dramatically since the collapse of Communism. These economies also differ in their narrow natural resource bases on land and in water, in their prospects for self reliance in economic development, and their overwhelming reliance on tourism as a source of exports. These economies are developing countries which need a consistent inflow of foreign direct investment to maintain economic growth. Such sovereign island economies differ in the extent to which they are home to a multitude of ethnic diversity, political systems, historical experience, economic and environmental vulnerability, ecological fragility, the types of risks facing private investors, and in the extent to which they are perceived as, or perceive themselves to be, insular and peripheral. In spite of the vast diversity as well as similarities, researchers are fascinated by the world of small island economies, and are intrigued by their unique features which cannot be addressed through a generalised set of rules. This paper analyses the geographical, historical, economic, tourism-oriented and institutional characteristics, as well as vulnerability to changes in the international economic, financial and political climates, of twenty Small Island Tourism Economies. The snapshot images provide a comparative assessment of the international country risk ratings, and highlight the importance of economic, financial and political risk ratings as components of a composite risk rating for Small Island Tourism Economies.Small size, Tourism, Volatility, Vulnerability, Country risk ratings, Economic risk, Financial risk, Political risk, Composite risk

Managing Value-at-Risk in Daily Tourist Tax Revenues for the Maldives

International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals, which determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies almost entirely on tourism for its economic and social development. As international tourism receipts are significant financial assets to the economies of SITEs, the timevarying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. The volatility in the levels and growth rates of daily international tourist arrivals are investigated in the paper. This paper provides a template for the future analysis of earnings from international tourism, particularly tourism taxes for SITEs, discusses the direct and indirect monetary benefits from international tourism, highlights tourism taxes in the Maldives as a development financing phenomenon, and provides a framework for discussing the design and implementation of tourism taxes. Furthermore, it is demonstrated that the analysis developed in this paper can be used by the Maldivian Government in determining monetary and fiscal policy, by creditors to evaluate the risks associated with providing financial support to the Maldives, and by resort operators to decide whether to expand or contract their operations.Small Island Tourism Economies (SITEs), International tourist arrivals, Tourism tax, Volatility, Risk, Value-at-Risk (VaR), Sustainable Tourism@Risk (ST@R).

Risk Management of Daily Tourist Tax Revenues for the Maldives

International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals which, in turn, determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies entirely on tourism for its economic and social development. As these receipts from international tourism are significant financial assets to the economies of SITEs, the time-varying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. In this paper, the volatility in the levels and growth rates of daily international tourist arrivals is investigated.Small Island Tourism Economies (SITEs), International tourist arrivals, Tourism tax, Volatility, Risk, Value-at-Risk (VaR), Sustainable Tourism-@-Risk (ST@R)

Managing Value-at-Risk in Daily Tourist Tax Revenue for the Maldives

International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals, which determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies almost entirely on tourism for its economic and social development. As international tourism receipts are significant financial assets to the economies of SITEs, the time-varying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. The volatility in the levels and growth rates of daily international tourist arrivals are investigated in the paper. This paper provides a template for the future analysis of earnings from international tourism, particularly tourism taxes for SITEs, discusses the direct and indirect monetary benefits from international tourism, highlights tourism taxes in the Maldives as a development financing phenomenon, and provides a framework for discussing the design and implementation of tourism taxes. Furthermore, it is demonstrated that the analysis developed in this paper can be used by the Maldivian Government in determining monetary and fiscal policy, by creditors to evaluate the risks associated with providing financial support to the Maldives, and by resort operators to decide whether to expand or contract their operations. Acknowledgements: The first author acknowledges the financial support of the Australian Research Council, the second author wishes to acknowledge a UWA Research Fellowship, and the third author is most grateful for the financial support of an International Postgraduate Research Scholarship and University Postgraduate Award at UWA. The authors wish to thank the Editor, two referees, Clive Granger, Matteo Manera and Juerg Weber for helpful comments and suggestions. An earlier version of this paper was presented at the Second International Conference on Tourism and Sustainable Development: Macro and Micro Economic Issues, Cagliari, Sardinia, Italy, September 2005.Small Island Tourism Economies (SITEs), international tourist arrivals, tourism tax, volatility, risk, Value-at-Risk (VaR), Sustainable Tourism@Risk (ST@R)

Molds and mycotoxins in poultry feeds from farms of potential mycotoxicosis

Forty five finished poultry feed samples, collected from different broilers, broiler breeders and layers farms were divided into two parts, for mycological and mycotoxins examination. In counting of molds, dilute plate technique was used, whereas feed parts were used for mycotoxin estimation, they were subjected to four standard kits of Aflatoxin, Ochratoxin, T-2 toxin and Fumonisins. Mold counts were around 105 cfu.g-1 sample. Fourteen mold genera were recovered. From the systematic point of view, 2 genera belonged to Zygomycetes (i.e. Mucor, Rhizopus,), 1 genus belong to Ascomycetes (i.e. Eurotium); the majority, within so-called mitotic fungi (formerly Deuteromycetes), encompassed 11 genera (i.e. Acremonium, Alternaria, Aspergillus, Fusarium, Paecilomyces, Penicillium, Scopulariopsis,, Trichothecium, Ulocladium and Aerobasidium). The most frequent fungi were those from the genus Aspergillus. The concentrations of the four analyzed mycotoxins in the poultry finished feeds, and the percentages of the recovered mycotoxins, revealed that aflatoxins was recovered in 91.1% of the examined samples, with a mean value of 179.1µg/kg. The same percentage was found with Ochratoxins, but with lower mean concentration of 159.4µg/kg. In the third order were Fumonisins mycotoxins were in the third order, and they were recovered in 51.1% of the tested samples with a mean value of 127µg/kg. In the fourth order was T-2 toxin, with a percentage of 2.2% and a value of 50.0µg/kg

Modelling International Tourism Demand and Volatility in Small Island Tourism Economies

Small Island Tourism Economies (SITEs) vary in their size, land area, location, narrow resource bases, economic development, an overwhelming reliance on tourism, and a consistent inflow of foreign direct investment for economic growth. SITEs differ in their ethnic diversity, political systems, economic and environmental vulnerability, ecological fragility, and the risks facing investors. Owing to natural disasters, ethnic conflicts, crime, and the threat of global terrorism, there have been dramatic changes in the arrivals of international tourists to SITEs. These variations in international tourism demand to SITEs, particularly the conditional variance (or volatility) in international tourist arrivals, have not previously been analysed in the tourism research literature. An examination of the conditional volatility of international tourist arrivals is essential for policy analysis and marketing purposes. This paper models the conditional mean and conditional variance of the logarithm of monthly international tourist arrivals and the growth rate (or log-difference) in the monthly international tourist arrivals for six SITEs, namely Barbados, Cyprus, Dominica, Fiji, Maldives, and Seychelles. Diagnostic checks of the regularity conditions of the logarithm of monthly international tourist arrivals and their growth rates suggest that the estimated univariate models of trends and volatility are statistically adequate. Therefore, the estimated models are appropriate for purposes of public and private sector management of tourism. Acknowledgements: The authors wish to thank Felix Chan, Suhejla Hoti, Christine Lim and two anonymous referees for helpful comments and suggestions. The first author is most grateful for a UWA Research Grant, and the second author wishes to acknowledge financial support of Australian Research Council.Island economies, small size, vulnerability, international tourism demand, arrival rate, trends, volatility, time-varying conditional variance, GARCH, GJR, asymmetry, shocks, regularity conditions