Description

This paper studies the role of airlift supply on the tourism sector in the Caribbean. The
 paper examines the relative importance of U.S.-Caribbean airlift supply factors such as the
 number of flights, seats, airlines, and departure cities on U.S. tourist arrivals. The possible
 endogeneity problem between airlift supply and tourist arrivals is addressed by using a
 structural panel VAR and individual country VARs. Among the four airlift supply
 measures, increasing the number of flights is found to be the most effective way to boost
 tourist arrivals on a sustained basis. As a case study, the possible crowding effect of
 increasing the number of U.S. flights to Cuba is investigated and, based on past
 observations, we find no significant impact on flights to other Caribbean countries. The
 impact of natural disasters on airlift supply and tourist arrivals is also quantified.

More publications in this series: Working Papers

More publications by: Sebastian Acevedo Mejia ; Lu Han ; Hye S Kim ; Nicole Laframboise