Elasticities relevant to tourism in Scotland: evidence review

An overview of estimates of price elasticities of demand (PED) and income elasticities of demand (YED) for tourists to destinations relevant to Scotland; price elasticities of supply (PES) of commercial accommodation relevant to Scotland and other factors influencing the demand and supply of tourism.


1. As a result, secondary research and meta-analyses themselves such as Peng et al. (2015) were excluded, but any post-2010 primary studies referred to by those sources were included in this report.

2. This report adopted the widely used Euclidean distance as the distance measure, which was calculated as the square root of the sum of the squares of the distances between corresponding variables in the two destinations being considered. All variables were standardised to z-scores so that the measure of distance would not be overly influenced by the variables on a larger scale. To determine the distance between two clusters, the average linkage (between groups) method was used by calculating the average distance between all pairs of destinations in the two clusters.

3. The average daily temperature and average monthly precipitation are both 10-year averages from 2007 to 2016.

4. Price elasticities are normally negative, although certain goods (such as Veblen and Giffen goods) which do not follow the law of demand could have a positive PED.

5. Unless specified otherwise, tourism demand is for the whole destination rather than a specific tourism sector.

6. The overall median (or average) is defined as the median (or average) of the all the median values across 21 destinations so that each destination carries an equal weight.

7. The median provides a more robust measure of central tendency as the average could be strongly influenced by extreme values.

8. If the study by Dogru and Sirakaya-Turk (2018) is excluded, the estimated PED would range from -5.10 to 1.92 with an overall median of -1.53 and an overall average of -1.34.

9. Note that the YED discussed in this section and its sub-sections is for inbound tourism demand which is different from the income elasticities of outbound tourism demand presented in Section 3.1.2 and 3.1.3.

10. If the study by Dogru and Sirakaya-Turk (2018) is excluded, the estimated PED would range from -0.52 to 4.45 with an overall median of 1.28 and an overall average of 1.33.

11. It should be noted the study by Peng et al. (2015) was a meta-analysis on tourism demand, and the reported elasticities were general price elasticities of tourism demand, rather than specific elasticities of tourism taxation.


Email: juanmanuel.scarilli@gov.scot

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