Modeling Caribbean Tourism Demand: An Augmented Gravity Approach

Abstract

This study uses a gravity framework to model tourism demand for the Caribbean. The basic model is augmented by Linder’s hypothesis—tourist flows are partly determined by the similarity in preferences between the destination and source markets—and climate distance, which measures the gap between climate conditions in origin and destination countries. The results indicate that traditional gravity variables are significant in explaining demand for the region. Habit persistence has the largest impact on demand, a result which holds promise for regional policymakers. Evidence is also unearthed that similarity in preferences between the region and its source markets, and climate distance are important demand determinants