ECCB Working Paper - What is Driving Toursim Flows to the ECCU

A.2 Model Price Formulas

= (

) ∗ (

)

= ∑( ⁄ ) =1

w is the share of international arrivals to country k. In this study, both regional and extra-regional destinations were used as substitutes. These include:

Bahamas, The

Barbados

Dominican Republic

Jamaica

Fiji

Maldives

Malta

Aruba

A.3 Interpretation of Coefficients

As economists, we are usually interested in marginal effects and elasticities.

If we consider a simple model:

= +

is the marginal effect of x on y .

Given the above, =

In the case of the PPML, the marginal effects are given by:

[ | ]

′ )

= (

This means that is an elasticity if is measured on a logarithmic scale as in equation (4).

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