Going Viral: A Gravity Model of Infectious Diseases and Tourism Flows

IMF Working Papers, July 3, 2020

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The paper develops a gravity model framework to estimate the impact of infectious diseases on bilateral tourism flows among 38,184 pairs of countries over the period 1995–2017.
International tourism is adversely affected by disease risk; the negative effect is both statistically and economically significant.
In the case of SARS, a 10 percent rise in confirmed cases leads to a reduction of as much as 9 percent in tourist arrivals.
Infectious diseases have a smaller and statistically insignificant negative effect on tourism flows to advanced economies.
The magnitude and statistical significance of the impact of infectious diseases are much greater in developing countries, where such diseases tend to be more prevalent and health infrastructure lags behind.

Uses a gravity model framework applied to bilateral tourism flows covering 38,184 country pairs for 1995–2017.
Empirical analysis examines the relationship between confirmed cases of infectious diseases (example: SARS) and tourist arrivals.

Disease outbreaks can produce large economic costs for the tourism sector, with pronounced heterogeneity across destination economies.
Advanced economies appear more resilient to tourism declines linked to infectious disease risk, whereas developing countries face larger and more significant tourism shocks due to higher prevalence of diseases and weaker health infrastructure.
Quantitative example: a 10 percent increase in confirmed SARS cases → up to a 9 percent decrease in tourist arrivals, illustrating substantial sensitivity of tourism to disease incidence.