ASYMMETRIC IMPACT OF ENERGY PRICES ON TOURISM DEMAND IN PAKISTAN

Author(s) : Nabila Asghar and Muhammad Asif Amjad

Abstract:

Tourism is the flourishing sector in Pakistan because there are multiple religious, archaeological and beautiful adventure places. This study explores the different determents of tourism demand based on the asymmetric effect of energy prices and the symmetric effect of the exchange rate, globalization, and governance during 1980-2020. The domestic pump diesel prices in liters have been used as the proxy to measure energy prices. The Non-linear ARDL econometric approach finds that positive shocks of energy prices decline tourism while negative shocks of energy prices increase tourism demand. While the deprecation in the exchange rate, massive globalization, and good governance significantly enhance tourism demand in Pakistan. The study recommends that Pakistan government should promote cheaper energy resources to promote tourism demand.