Asymmetric responses in the tourism demand function

In this paper we examine the tourism demand function in Turkey in order to formulate policy suggestions that may help private agents and public authorities in designing their appropriate actions. To this purpose, we include asymmetries in our analysis and examine the role of human capital, as well as, the role of information, communication and technology (ICT) using a dynamic Generalized Method of Moments (GMM). Our findings show: (a) the existence of asymmetries and in particular that negative shocks such as a reduction in the income of visitors' countries or an increased real exchange rate variability, not only reduce tourism arrivals by more than the increase of tourism arrivals driven by equal-size positive shocks, but they also impact much earlier on tourism inflows into Turkey; (b) investment in human capital could have a large long run impact effect on Turkish tourism industry; (c) policies encouraging ICT should have a positive influence and (d) tourism marketing campaigns abroad should be directed towards Turkey's major trading partners.