Wealth Effects of Housing and Stock Markets On Outbound Tourism

Abstract

The effects of stock market wealth and housing wealth on the demand for outbound tourism by the residents of Singapore, while controlling for other important determinants for outbound tourism, are investigated. From the empirical results, the author concludes that there is weak evidence to support the presence of stock market wealth effect and strong evidence to support the presence of housing wealth effect on outbound tourism. Weak evidence of stock market wealth effect is observed because the model derived from Akaike information criterion does not find significant effect of stock market wealth, but the model derived from Schwartz criterion shows that positive stock market wealth effect is present. Strong evidence of housing wealth effect is observed because the models estimated with both criteria show that housing wealth has negative effect on such consumption. The importance of the government intervention in the public housing of Singapore that leads to such negative housing wealth effect is explained in the conclusion.