Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand

Kan W.H. TSUI, David TAN, Kong Wing CHOW

Research output: Other Conference ContributionsConference Paper (other)Researchpeer-review

Abstract

Tourism is one of the most important economic activities in New Zealand and tourists commonly travel by air, given that New Zealand is an isolated country. This paper explicitly models the inter-relationships among air transport, tourism and property prices in the regional cities of New Zealand. We investigated this inter-relationships by constructing a three-stage least squares (3SLS) structural model using a balanced monthly panel dataset of New Zealand’s six smaller regions/cities from January 2008 to December 2014. Our empirical results showed that tourism activity raised airline seat capacity scheduled at an airport. This indicated that airlines did plan their seat capacity according to tourism activities within a region. However, adjusting the airline seat capacity of an airport alone had no significant effect on the tourism demand of the regions. This implied that tourism does not react to exogenous changes in the supply of air travel in the sample. Interestingly, both airline seat capacity and tourism activity have no significant effect on the property prices of the regions. This may be a unique characteristic of regional cities in New Zealand.
Original languageEnglish
Publication statusPublished - 29 Jun 2016
EventThe 57th Annual Conference of New Zealand Association of Economists - New Zealand, Auckland, New Zealand
Duration: 29 Jun 20161 Jul 2016

Conference

ConferenceThe 57th Annual Conference of New Zealand Association of Economists
CountryNew Zealand
CityAuckland
Period29/06/161/07/16

Fingerprint

New Zealand
Tourism
Property prices
Air transport
Seat
Airlines
Airports
Interrelationship
Air
Tourism demand
Tourists
Economic activity
Three-stage least squares
Empirical results
City-regions
Structural model

Cite this

TSUI, K. W. H., TAN, D., & CHOW, K. W. (2016). Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand. Paper presented at The 57th Annual Conference of New Zealand Association of Economists, Auckland, New Zealand.
TSUI, Kan W.H. ; TAN, David ; CHOW, Kong Wing. / Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand. Paper presented at The 57th Annual Conference of New Zealand Association of Economists, Auckland, New Zealand.
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TSUI, KWH, TAN, D & CHOW, KW 2016, 'Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand' Paper presented at The 57th Annual Conference of New Zealand Association of Economists, Auckland, New Zealand, 29/06/16 - 1/07/16, .

Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand. / TSUI, Kan W.H.; TAN, David; CHOW, Kong Wing.

2016. Paper presented at The 57th Annual Conference of New Zealand Association of Economists, Auckland, New Zealand.

Research output: Other Conference ContributionsConference Paper (other)Researchpeer-review

TY - CONF

T1 - Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand

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AU - TAN, David

AU - CHOW, Kong Wing

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N2 - Tourism is one of the most important economic activities in New Zealand and tourists commonly travel by air, given that New Zealand is an isolated country. This paper explicitly models the inter-relationships among air transport, tourism and property prices in the regional cities of New Zealand. We investigated this inter-relationships by constructing a three-stage least squares (3SLS) structural model using a balanced monthly panel dataset of New Zealand’s six smaller regions/cities from January 2008 to December 2014. Our empirical results showed that tourism activity raised airline seat capacity scheduled at an airport. This indicated that airlines did plan their seat capacity according to tourism activities within a region. However, adjusting the airline seat capacity of an airport alone had no significant effect on the tourism demand of the regions. This implied that tourism does not react to exogenous changes in the supply of air travel in the sample. Interestingly, both airline seat capacity and tourism activity have no significant effect on the property prices of the regions. This may be a unique characteristic of regional cities in New Zealand.

AB - Tourism is one of the most important economic activities in New Zealand and tourists commonly travel by air, given that New Zealand is an isolated country. This paper explicitly models the inter-relationships among air transport, tourism and property prices in the regional cities of New Zealand. We investigated this inter-relationships by constructing a three-stage least squares (3SLS) structural model using a balanced monthly panel dataset of New Zealand’s six smaller regions/cities from January 2008 to December 2014. Our empirical results showed that tourism activity raised airline seat capacity scheduled at an airport. This indicated that airlines did plan their seat capacity according to tourism activities within a region. However, adjusting the airline seat capacity of an airport alone had no significant effect on the tourism demand of the regions. This implied that tourism does not react to exogenous changes in the supply of air travel in the sample. Interestingly, both airline seat capacity and tourism activity have no significant effect on the property prices of the regions. This may be a unique characteristic of regional cities in New Zealand.

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M3 - Conference Paper (other)

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TSUI KWH, TAN D, CHOW KW. Will air transport or tourism affect urban property prices? The case of regional cities in New Zealand. 2016. Paper presented at The 57th Annual Conference of New Zealand Association of Economists, Auckland, New Zealand.