THE RELATIONSHIP BETWEEN HEALTH CARE AND TOURISM DEMAND IN IRANIAN ECONOMY

Majid FESHARI

Assistant Professor of Economics, Kharazmi University (Corresponding Author)

majid.feshari@gmail.com

Hedayat HOSSEINZADEH

Assistant Professor, Department of Economics, Payame Noor University, Iran

hedhus@gmail.com

Abstract

The relationship between health care and international tourism is one of the important issues in tourism literature. The main objective of this study is to investigate the correlation between health care and international tourism in the long-run and short-run by using a fully modified ordinary least square (FMOLS) and Toda-Yamamoto approach over the time period of 1971-2016. The empirical results of this study indicate that there is a long-run relationship between health care and tourism. Health care has a positive and significant effect on the tourists’ arrivals as a proxy for international tourism demand. Moreover in the short-run, the results suggest that there is unilateral causality from health care to international tourism. Hence, the main implication policy of the study is that policy makers should adopt policies to improving health care and attract more international tourists.

Keywords: Health Care, International Tourism, FMOLS, Toda and Yamamoto Approach

JEL classification: C22, I10
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