Abstract

This study attempts to determine whether changes in income, travel costs, and the cost of living in a foreign country affects travelers’ decisions to migrate to New Zealand. In this study, three different groups of travelers are analyzed, which are students, tourists, and visitors. I hypothesize that increases in travel costs will have a negative effect on all three types of traveler intensities, increases in income will have positive effects on the travel intensities of all three traveler types, and prices abroad relative to one’s origin will have a more significant effect on students than tourists, but no significant effect on visitors. To test these hypotheses, I will use a double log equation run with a fixed effects model to estimate the elasticities of income, travel costs, and prices abroad in regards to travel intensities of the three chosen traveler types, all of whom are traveling to New Zealand from 68 selected countries from around the world in the 2005-2014 time horizon. This study estimates that an increase in a tourist’s income by one percent will increase tourist travel intensity to New Zealand by 0.97 percent, and when there is an increase in the buying power of a tourist’s currency in New Zealand, tourist travel intensity is also estimated to increase. The study found no significant results for students and visitors.

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