Unlocking the Dynamic Impact of Economic and Non-Economic Factors on Tourism Demand in BRICS Economies

Abstract

Abstract In recent decades, economic and non-economic factors have significantly shaped tourism demand, affirming attention from researchers and policymakers. This study employs advanced econometrics techniques, including cross-sectional dependency, slope homogeneity, unit root, cointegration and long-run estimation, to explore the impact of economic determinants (world GDP per capita, exchange rate, interest rate, and relative price) and non-economic factors (political stability and climate change) on tourism demand in BRICS economies from 1996 to 2022. Findings indicate that exchange rates, interest rates, political stability, and world GDP per capita positively influence tourism demand, while climate change and relative price negatively impact it. Moreover, bidirectional causality exists between world GDP per capita and tourism demand, and one-way causation is observed for exchange rate, relative price, and political stability. In conclusion, the economic determinants significantly impact tourism demand more than non-economic factors. The study provides policy guidelines for enhancing tourism demand.