Tourism economists Aon Waqas-Awan, Jaume Rossell-Nadal, and Maria Santana-Gallego studied the demand for outbound international travel in

Tourism economists Aon Waqas-Awan, Jaume Rosselló-Nadal, and Maria Santana-Gallego studied the demand for outbound international travel in 192 countries, between 1995 and 2016. The income elasticity of demand in low, low-middle, and high-middle income countries was 0.45, 0.76, and 0.68 respectively. Income did not significantly affect outbound travel from high income countries.
a. If incomes rise by 10%, how would the demand for outbound travel change in low, low-middle, and high-middle income countries?
b. If incomes fall by 10%, how would the demand for outbound travel change in low, low-middle, and high-middle income countries?
c. During a boom, which markets (low, low-middle, or high-middle income countries) should an airline target?
d. During a recession, which markets should an airline target?

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a If incomes rise by 10 the demand for outbound tr... View the full answer