~ 21 ~ French and German Tourism in the Mediterranean – A Market Share Analysis

Tourism is an important economic sector for Mediterranean countries, and these compete for market share. In our study we look at the evaluation of market shares amongst a group of seven Mediterranean countries for both German and French tourists. Our data shows that these shares have changed significantly over the period 1963-2009. We utilise the Almost Ideal Demand System, a model grounded in economic theory, to understand what has driven these changes. The estimated own-price elasticities indicate the sensitivity of demand to price increases in each country, while cross-price elasticities shed light on the relative complementarity and substitutability of the holiday destinations. We find that while Spain was relatively unaffected by the developmen