Resumen de Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence
Cem Işık, Ercan Sirakaya-Turk, Serdar Ongan
The global economic outlook is more uncertain than ever before and sensitive to uncertaintiesrelated to a variety of economic policies decisions of all stakeholders and governments. Theseperceived uncertainties may be the culprit in shrinking the size of overall economic activity. Underincreasing uncertainties, travel and vacation plans of consumers can be canceled or postponed.Therefore, policy-related economic uncertainties are expected to affect tourism demand beyondwell-established economic and noneconomic factors. In this study, we explore the efficacy and theimpact of the economic policy uncertainty (EPU) index in predicting the tourism demand oninternational tourist arrivals (a measure of tourism demand) to the United States from Mexico andCanada over the period of January 1996–September 2017. The findings of the study reveal thatEPU is a significant predictor as increases in the EPU index lead to decreases in tourism demand tothe United States. Canadian tourists seem to be more sensitive to EPUs. Increases in the EPU indexcause them to reduce Canadians’ vacations to the United States proportionally more than theMexicans. To enhance the explanatory power of current models, the uncertainty can be a theo-retically significant construct thus needs to be included when calibrating demand models.
