Download Demonstration Analysis on the Correlation between Tourism Industry and Economy Growth

Demonstration Analysis on the Correlation between Tourism Industry
and Economy Growth
WANG Di, CUI Herui
Department of Economics and Management, North China Electric Power University, Baoding, 071003
[email protected]
Abstract: In this paper, we use Eviews5.0 to analysis the correlation of the tourism industry and the
economy growth on the basis of the data from 1990 to 2007. According to the demonstration analysis,
we find that the development of tourism can promote economy growth. In the end, we put forward some
suggestions to develop tourism industry in order to promote economy growth.
Keywords: tourism industry, regression analysis, economy growth
1 Introduction
In the international economy, tourism industry is an enterprise gather which can satisfy the demand
of tourists according to society division of labor. It can provide all kinds of tour products. For example,
tourism agency, tourism hotel, and transportation enterprise are all the most great modern tourism
industries. Nowadays, the tourism is a huge newly arisen industry of the industry scale in the world. It is
called "no smoking industry" and "sun industry forever". It has already been called one of the greatest
three industries. The other two are petroleum industry and car industry. Tourism is also an industry of
which can last forever, not only need big space, but also the resources of tourism cannot be used
completely comparing with other industries.
2 The recent condition of tourism industry
From the openness of our country, the income of the residents and leisure time are growing
continuously, there are more and more people travel from one place to other places. The high-speed
development of market economy and the better of people's lives also create new demand for tourism. As
a leader industry in the third industry, tourism has already been referred to the advantage industry or
pillar industry in most regions. There people adopt a lot of measures to promote it. The tourism income
is the important contents of tourism activities. On one hand, it reflects satisfy of tourists’ demand by the
supply of other people who provide tourism products; on the other hand, it can reflect the tourism
department and the enterprise develop continuously during the value of conducting the activity and the
value of carrying out the activity. The tourism income is a comprehensive index which can measure the
tourism economy and the effect of it. It is also a sign which can measure the tourism economic of a
region or a nation.
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1990 1991 1992 1992 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Figure 1: Our country’s domestic tourism income from 1990 to 2007
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From 1990 to 2007, our country’s domestic tourism income (see figure 1) increased gradually, the
trend is almost a straight growing line. In 1990, our country’s domestic tourism income is 17,000
million ¥, it is 777,100 million ¥ up to the year 2007. It is 46 times compared to the year 1990. In 2007,
the domestic tourism income account for 3.15% of GDP. Because of SAS, it was fluctuated in 2003, but
it was not fluctuated obviously, on the whole, it did not affect the trend of the growing domestic tourism
income from 1990 to 2007. The domestic tourism is more and more import in the national economic
along with the development of market economy and the better of people’s income. In 2007, the total
number of tourists is 161 million, the rate of traveling is 122.5%, the total cost is 77706.2 million ¥, the
average cost is 482.6 ¥ each person. The development of tourism can bring the input-output multiplier
effect and the employment multiplier effect. It can also become a growing pole which can create pole
effect and proliferation effect.
3 Demonstration analysis tourism industry and economy growth
3.1 The establishment of the model
Yt is the ‘t’ period’s GDP, Xt is the ‘t’ period’s domestic tourism income. Establish simple linear
regression model:
Yt=C+β0Xt+εt
t=1990, 1991……2007
3.1.1
C, β0 are parameters; εt is disturbance
（ ）
：
year
1990
Table 1 GDP and Tourism Domestic income from 1990 to 2007
(unit ten million yuan)
Tourism
Tourism
GDP
GDP
Year
Domestic
Domestic
income
income
18667.82
170
1999
89677.05
2831.9
：
1991
21781.5
200
2000
99214.55
3175.5
1992
26923.48
250
2001
109655.2
3522.4
1992
35333.92
864
2002
120332.7
3878.4
1994
48197.86
1023.5
2003
135822.8
3442.3
1995
60793.73
1375.7
2004
159878.3
4710.7
1996
71176.59
1638.4
2005
183084.8
5285.9
1997
78973.03
2112.7
2006
209407
6229.7
1998
84402.28
2391.2
2007
246637
7771
According to the data from table 1, we use Eviews5.0 software package to estimate the parameters
by Ordinary Least Square, we can see the result from table 2.
Table 2: The results of regression
Variable
Coefficient
Std. Error
C
X
R-squared
14554.75
30.23146
0.985502
3229.587
4.506690
0.916700
32.97858
Mean dependent var
0.0004
0.0000
99997.76
Adjusted R-squared
S.E. of regression
Sum squared resid
0.984596
8180.331
1.07E+09
S.D. dependent var
Akaike info criterion
Schwarz criterion
65909.76
20.96129
21.06022
Log likelihood
Durbin-Watson stat
-186.6516
1.368877
F-statistic
Prob(F-statistic)
1087.587
0.000000
1216
t-Statistic
Prob.
From table2, we get the regression equation:
Yt = 14554.75 + 30.23146 X t
(4.506690) (32.97 858)
R2=0.985502 DW=1.368877
(3.1.2)
F=1087.587
3.2 Test of the regression model
R2 is the coefficient’s square of the correlation of the real Y and the estimated Ŷ. It is much better
near 1 than it does not near it. It is to say the nearer the better. We can see from table2 that R2 is
0.984596, the adjusted R2 is 0.984596, they both near 1.From this degree we can say that the model is
good. The equation’s significance test is to predict whether it is significance or not of the liner
correlation of explain variables and explained variables.
F test is the most common test to test this significance. Here, n is 18 and k is 1, when F>Fa(1,n-1),
we think that the linear regression model is suitable on the whole. From table2, we know F is 1087.587,
Fa(1,n-1) is 4.49 .Under the confidence level 5%, 1087.587 is much bigger than 4.45. As a result, it is
suitable on the whole. If the total correlation is significance, it is not to say that each explain variable is
significance to each explained variable. In order to judge whether we can let variable stay in the model
or not, each variable must be tested. If some variables’ affection to explained variable is not significance,
we should deplete it in order to establish simpler model. Under the confidence level 5%, when n is 18
and k is 1, we can get ta/2(n-2), it is 2.101. From table2, we know 32.97858 and 4.506690 are both bigger
than 2.101, from the result we can say that parameters c and β0 are significance not 0.
From table2, we know D.W. is 1.368877. When n is 18 and k is 1, we check the distribution of
D.W., we get dl is 1.16 and du is 1.39. Because 1.368877 is between 1.16 and 1.39, we can not judge
whether it exists serial correlation or not. But G.S.Maddala pointed that it is suitable to use du as real
marginal value. That is to say, in generally speaking, if d fall into the zone (dl, du), we think the
disturbance exists auto-serial correlation. The phenomenon can be explained that there are some
variables, these variables are important factors which can affect GDP, because model 1 did not contain
these variables, they are contained in disturbances, as a result, it exists auto-serial correlation.
3.3 Improvement of the model
Because of auto-serial correlation, we must improve model 1 in order to express the correlation of
tourism income and the level of economic development correctly. We use Cochrane-Orcut method to
analysis and we can get the results through Eviews5.0. Just as follows:
Table 3: The results of regression
Variable
C
X-0.31366*X(-1)
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
Coefficient
Std. Error
3393.582
t-Statistic
3.312222
Prob.
0.0047
1.275314
23.25952
Mean dependent var
S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)
0.0000
76122.15
46974.56
20.91454
21.01257
541.0054
0.000000
11240.30
29.66320
0.973022
0.971223
7968.622
9.52E+08
-175.7736
1.948883
From table3, we get the regression equation:
(3.3)
(3.312222) (23.25952)
R2=0.973022 F=541.0054 DW=1.9488883
Yt * = Yt − 0.31366 X t −1 , X t * = X t − 0.31366 X t −1 , we get et = 0.31366et −1 through auto-regression analysis. From the
results we can see clearly that D.W. is 1.948883, the value of D.W. raised from 1.36887 to 1.948883. It is
Yt * = 11240.30 + 29.66320 X t *
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between du and 4-du, it fell in the interval of non-serial correlation zone. Coefficient, T-statistic,
F-statistic all arrived at an ideal level.
3.4 Conclusions
We can make the conclusion that: from 1990 to 2007, there exists a linear correlation between
tourism industry and economy grow. If the tourism income increase 1¥, the GDP will increase
29.47297¥. As a result, we should value the development of tourism industry and develop tourism
industry’s function to economy growth, then strength the capability of national economic.
4 Suggestions on developing tourism industry and promoting economy growth
The tourism industry is an industry which is rising, its growth elasticity is high, and the tourism ’s
and other industries’ boundary is more and more misty, the correlation is more and more obvious along
with the development of tourism, the tourism industry plays an important role to the whole structure of
the national economic. Tourism is placed a core position in the international economy and the third
industry. The tourism promoted the development of transportation, dining, hotel directly, and also
affected and promoted agriculture, forestry, herding and fishing, the structure of cities, manufacturing,
culture and athletics. In generally speaking, the number of tourists in flourish regions is much bigger
than in poverty regions, when a region is much flourisher than other regions but it can attract more
tourists, the consumption which brought by these tourists is an obvious kind of incitement. This kind of
incitement not only can promote the development of the region tourism but also can promote the
development of the whole national economic.
Our country’s resources are extremely abundant, the prospective of develop tourism is very vast
and the function of the tourism to economic is outstanding. We should develop the advantages of every
aspect on the basis of promoting the economical efficiency and walk a sustainable way. Sustainable
tourism is the use of sustainable theory in tourism industry. Actually, it requests that tourism, nature,
culture and human become integrity. Tourism sustainable development is a positive development on the
basis of tourism system of tourism resource. It also includes the continuous output of economic
efficiency. At present, our country’s activities of tourism economic express a large-scale business
development, the artificial view and so on, antinomy and problem are obvious. The interference and
disturbance of tourism to environment have not been controlled completely. It expresses our country’s
tourism is in the unsustainable stage. Walking sustainable way is the destination of our government in
developing tourism, but this need a long-term process. Currently, our country’s tourism has not arrived
at a sustainable stage. This is the total characteristic of our tourism development.
Carrying out the tourism sustainable is a huge system of engineering, involving economic,
development of society and each realm of the environmental protection. It urges the government
department and tourism enterprise carry out all-directions of sustainable management from micro and
macro views. Therefore, our tourism can circulate in an adjusted orbit which can keep the ecosystem
sustainable, management sustainable and society sustainable.
5 Conclusions
In this paper, we use Eviews5.0 to analysis the correlation of the tourism industry and the economy
growth on the basis of the data from 1990 to 2007, the empirical analysis results show that tourism has a
significance impact on economy growth and the rate of the current economy growth is much smaller
than tourism. Developing tourism vigorously will stimulate economic develop rapidly, improve the
living standards of residents in the community and meet people's spiritual and cultural needs.
Tourism is a new point of economy growth and it plays an important role in the national economy.
Developing tourism unreasonably will erode the natural and cultural landscape and make the basement
of survival and development weak. In order to develop tourism healthily we should regulate the
relationship between people and environment reasonably. Turism will face huge challenges as an
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important component of economy development. In order to make tourism up to the requirements of
economy development at home and abroad, we must adopt innovative strategies and measures and
follow a path of sustainable development.
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