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Linking tourism flows and biological biodiversity in Small Island Developing States (SIDS): evidence from panel data

Published online by Cambridge University Press:  25 March 2013

Sonja S. Teelucksingh  and
Patrick K. Watson
Sonja S. Teelucksingh
Affiliation:
Department of Economics, University of the West Indies, St Augustine, Trinidad & Tobago. Tel: + 1 868 662 2002 x 83231/3057/2398. Fax: + 1 868 662 6555; and Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies, Trinidad & Tobago. Tel: + 1 868 662 6965. Fax: + 1 868 645-6329. E-mail: sonja.teelucksingh@sta.uwi.edu
Patrick K. Watson
Affiliation:
Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies, Trinidad & Tobago. E-mail: patrick.watson@sta.uwi.edu
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Abstract

Small Island Developing States (SIDS) are characterized by high levels of biodiversity that are under threat. Simultaneously, the tourism sector plays a key role in many of these economies. In this paper, the Hausman-Taylor estimator is used to investigate a tourism demand function in SIDS in which marine and terrestrial biodiversity play a key role, in addition to the traditional economic and price variables. This estimator allows for both the presence of time-invariant variables, a standard feature of environmental data, and the existence of endogenous covariates. Levels of biodiversity are found to have a significant influence on tourism in SIDS and, in particular, a test for redundant variables shows that the biodiversity variables are jointly significant. This justifies their inclusion in a tourism demand function, over and above the conventional economic factors, and points to the importance of national and international policy in protecting the biodiversity of SIDS.

Type
Special Section on Biodiversity-based development in Small Island Developing States
Information
Environment and Development Economics , Volume 18 , Issue 4 , August 2013 , pp. 392 - 404
Copyright
Copyright © Cambridge University Press 2013 

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