Does World Uncertainty and Economic Policy Uncertainty Affect Tourism in G7 Countries? Evidence From Quantile-on-Quantile Regression

Abstract

This study empirically examines the correlations between economic policy uncertainty (EPU) and world uncertainty (WU) and tourism in G7 countries. We use the quantile-on-quantile approach to explore some more subtle features between the variables and reveal asymmetric and heterogeneous relationships. The results show that the effects of EPU and WU are stronger at higher quantiles, and considerable variation is revealed across countries due to differing characteristics and economic circumstances. We determine that EPU has a negative impact on tourism and more significant positive effects are evident at different quantile combinations in all G7 countries, whereas the impact of WU on tourism is negative. We also found more significant positive effects of WU on tourism at different quantile combinations in all G7 countries.