Tourism Economics in Sri Lanka: An Econometric Analysis

Authors

  • Prasanna-Perera Lalith Welgamage Senior Lecturer in Economics & Statistics, Dept. of Economics and Statistics, University of Peradeniya, Sri Lanka

DOI:

https://doi.org/10.18533/ijbsr.v5i1.684

Keywords:

Employment, foreign exchange, R-Studio, Sri Lanka, tourism industry.

Abstract

Sri Lanka aims to transform its tourism sector into one of the largest foreign exchange earners in 2016 by attracting 2.5 million high spending tourists. Tourism was ranked as the fifth largest source of foreign exchange earnings in 2012, and third largest in 2013 contributing 5.2 percent to total foreign earnings of the country. Further to this, the Sri Lankan government also identified tourism as a major hub of the country’s economy. Given the multi-dimensional impact the sector has on the country’s economy, it has to be examined systematically. This paper develops an econometric model based on the Cobb-Douglas function to analyze the relation between foreign exchange earnings, tourist arrivals, tourist prices, and tourist spending and direct employment in tourism. These variables of tourism are estimated utilizing model parameters such as R-Studio based on data from the sample period from 2002 to 2013. The formula presented in this study can be used by policy makers to calculate future foreign exchange earnings, employment, arrivals and prices related to tourism in Sri Lanka.

Author Biography

  • Prasanna-Perera Lalith Welgamage, Senior Lecturer in Economics & Statistics, Dept. of Economics and Statistics, University of Peradeniya, Sri Lanka

    Dr. Prasanna Perera holds a BA (Honours - First Class) in Economics from University of Peradeniya, a MA in Economics from Thammasat University (Thailand) and a PhD in Economics from University of London and University of Peradeniya. Prasanna has nearly 20 years of teaching experience in the University of Peradeniya and currently serves as a Senior Lecturer (Gr. I). His research areas include International Trade with special focus on Regionalism, International Finance, Monetary Economics, Political Economy and Macroeconomics. Prasanna initiated the idea of Sport Economy in Sri Lanka and he appears regularly on electronic and other media. He has published a number of articles and books in Economics. He serves as a Visiting Lecturer in Economics at various universities in Sri Lanka and undertakes consultancies for both Government and Non-Government Organizations.  

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Published

2015-01-27

Issue

Vol. 5 No. 1 (2015): January

Section

Article

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