A time-varying analysis between economic uncertainty and tourism development in Singapore

Tourism development (TO) is seen as a viable solution to address economic policy uncertainty (EPU) risks. However, previous studies have largely ignored the relationship between short, medium, and long term by decomposing TO and EPU index at different time-frequency scales, especially in Singapore....

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Bibliographic Details
Published in:PloS one 2024-05, Vol.19 (5), p.e0302980-e0302980
Main Authors: Ngoc, Bui Hoang, Hoang, Canh Chi, Tram, Nguyen Huynh Mai
Format: Article
Language:English
Subjects:
Algorithms
COVID-19
COVID-19 - economics
COVID-19 - epidemiology
Development strategies
Economic aspects
Economic Development
Economic policy
Employment
Epidemics
Government revenue
Humans
Indexes
Industrial production
Literature reviews
Long term
Pandemics
Policy making
Political aspects
Public finance
Risk reduction
SARS-CoV-2
Singapore
Time
Tourism
Tourism development
Travel industry
Uncertainty
Wavelet analysis
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Summary:Tourism development (TO) is seen as a viable solution to address economic policy uncertainty (EPU) risks. However, previous studies have largely ignored the relationship between short, medium, and long term by decomposing TO and EPU index at different time-frequency scales, especially in Singapore. In this study, the Wavelet tools analysis and a rolling window algorithm are employed to re-visit the causal relationship between EPU, industrial production index (IPI), government revenue (GR), and tourism development (TO) in Singapore from January 2003 to February 2022. The findings revealed the heterogeneous effects of EPU on TO at different time horizons in terms of importance and magnitude over time. A rise in EPU results in a decline in TO at the low frequencies, indicating that EPU has a detrimental effect on TO over the short term. Conversely, in the long term, an increase in TO results in a decrease in EPU. Furthermore, the outcome also indicated that there is a uni-directional causality running from TO to EPU, GR and IPI. Expressly, we confirm that the negative co-movement is more pronounced in the aftermath of the COVID-19 crisis, particularly for EPU, and GR at low-medium frequencies throughout the research period. The findings provide tourism policymakers with insight to develop strategic plans for tourism development that consider the effects of economic policy uncertainty. By understanding how uncertainty impacts tourism, governments can tailor development strategies to mitigate risks and capitalize on opportunities.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0302980