Statistical relationships between the North Atlantic Oscillation and international tourism demand in the Balearic Islands, Spain

Abstract

A large number of studies have been devoted to analyzing international tourism demand; however, even today, the impact of climate and weather on tourism receives only limited attention. We studied the empirical influence of the North Atlantic Oscillation (NAO), the most important mode of variability in northern atmospheric circulation, on international tourism demand - specifically, tourist arrivals from the UK and Germany to the Balearic archipelago (Spain). We used 2 traditional techniques usually applied in natural sciences, cross-correlation functions and the Granger causality test, as well as a novel and flexible methodology called the autoregressive distributed lag (ARDL) boundstesting approach. ARDL modeling can be a useful tool in illuminating relationships between variables. Our empirical evidence demonstrates the existence of a statistical relationship between the NAO and tourist arrivals from the UK and Germany to the Balearic Islands. The finding of a statistical relationship between the NAO and tourism suggests that this atmospheric phenomenon can be of great interest to social researchers who study international tourism flows. The NAO index can be used as an explanatory variable in tourism demand models, allowing researchers to develop parsimonious models, as well as to avoid certain economic problems (e.g. multicolinearity). © Inter-Research 2010.