TOURISM DEMAND FUNCTION FOR PAKISTAN

Tourism is a good contributor to the services sector as well as the overall economic growth of a country. With the help of Auto Regressive Distributed Lag (ARDL) model this study attempts to estimate the tourism demand function in context of Pakistan and to explore, why tourism is not flourishing in Pakistan. Time series data were used for the duration of 26 years ranging from1984 to 2010. The study analyzes the prevailing law and order situation, internal and external conflicts and the ethnic tensions prevailing in the country impacts the tourism demand negatively whereas a better socioeconomic condition are favorable for the international tourism. Exchange rate that captures the prices factor have negative contribution in the demand function whereas, the income of the tourist has statistically significant positive impact on demand for tourism in both the short and long run