Testing for the random walk hypothesis in the case of visitor arrivals: evidence from Indian tourism

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Abstract:

Testing for the random walk hypothesis, which asserts that a series is a non-stationary process or a unit root process, in the case of visitor arrivals has important implications for policy. If, for instance, visitor arrivals are characterized by a unit root, then it implies that shocks to visitor arrivals are permanent. However, if visitor arrivals are without a unit root, this implies that shocks to visitor arrivals are temporary. This study provides evidence on the random walk hypothesis for visitor arrivals to India using the recently developed Im et al . (2003) and Maddala and Wu (1999) panel unit root tests. Both tests allow one to reject the random walk hypothesis, implying that shocks to visitor arrivals to India from the 10 major source markets have a temporary effect on visitor arrivals.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500109332

Affiliations: 1: Department of Economics, Monash University, PO Box 197, Caulfield East 3150, Australia 2: Griffith Business School, Department of Accounting, Finance and Economics, Gold Coast Campus, Griffith University, QLD 9726, Australia

Publication date: July 20, 2005

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