Argentinian and Brazilian Demands for Tourism in Uruguay

Abstract

Argentinian and brazilian demands for tourism in Uruguay are analyzed separately. these countries represent 66.25% of the receptive tourism in Uruguay; however, they present different characteristics. two long-run relationships among tourism expenditures—income and real touristic exchange rate—are found by applying the cointegrating methodology. the income–demand elasticity is positive and larger than one in both cases, confirming the hypothesis that tourism is a luxury good. moreover, this elasticity is smaller in Argentina (1.899) than in the brazilian case (2.679). the relatively larger inelasticity in the Argentinian case could be due to the important percentage of Argentinian with second homes in Uruguay. In addition, the real touristic exchange rate elasticity is positive and more inelastic in the Argentinian case (0.623) than in brazil (1.168).