IMF Working Papers

Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism

By Serhan Cevik

March 17, 2023

Download PDF

Preview Citation

Format: Chicago

Serhan Cevik. Peering Through the Fog of Uncertainty: Out-of-Sample Forecasts of Post-Pandemic Tourism, (USA: International Monetary Fund, 2023) accessed December 10, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper uses an augmented gravity model framework to investigate the historical impact of infectious diseases on international tourism and develops an out-of-sample prediction model. Using bilateral tourism flows among 38,184 pairs of countries during the period 1995–2017, I compare the forecasting performance of alternative specifications and estimation methods. These computations confirm the statistical and economic significance of infectious-disease episodes in forecasting international tourism flows. Including infectious diseases in the model improves forecast accuracy by an average of 4.5 percent and as much as 7 percent relative to the standard gravity model. The magnitude of these effects, however, is likely to be much greater in the case of COVID-19, which is a highly contagious virus that has spread fast throughout populations across the world.

Keywords: Gravity model, Infectious diseases, Out-of-sample forecasting, Predictability, Tourism flows

Publication Details

  • Pages:

    18

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/070

  • Stock No:

    WPIEA2023070

  • ISBN:

    9798400238321

  • ISSN:

    1018-5941