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The aim of this article is to investigate the claim that tourism development can be the engine for poverty reduction in Kenya using a dynamic, microsimulation computable general equilibrium model. The article improves on the common practice in the literature by using the more comprehensive Foster-Greer-Thorbecke (FGT) index to measure poverty instead of headcount ratios only. Simulations results from previous studies confirm that expansion of the tourism industry will benefit different sectors unevenly and will only marginally improve poverty headcount. This is mainly due to the contraction of the agricultural sector caused the appreciation of the real exchange rates. This article demonstrates that the effect on poverty gap and poverty severity is, nevertheless, significant for both rural and urban areas with higher impact in the urban areas. Tourism expansion enables poorer households to move closer to the poverty line. It is concluded that the tourism industry is pro-poor.

This paper contributes to the literature on the linkages between tourism and migration. Though it is widely recognised that the two phenomena are closely linked, and that migration may induce VFR (visiting friends and relatives) tourism, there has been little econometric evaluation of the relationship. The present analysis draws upon Australian data to identify a strong quantitative link between migration and VFR tourism. It also demonstrates a strong link between migration and other forms of tourism. Indeed the latter are almost equally as strong as the links between migration and VFR tourism. This unexpected finding has implications for policymakers and for conceptualising the migration-tourism relationship.

The real exchange rate (REX) has long been used as the proxy for prices in tourism demand models. However it has limitations, particularly when it comes to models of outbound tourism.As an alternative, a price competitiveness index (PCI) is developed and used as a proxy for prices in a model of outbound tourism from Australia. Results obtained show that while REX is statistically insignificant and yields a price elasticity of -0.002, PCI is significant and generates a price elasticity of -1.07. The results obtained show that PCI outperforms REX as the preferred price variable in modelling outbound demand on both theoretic and empirical grounds.Furthermore, this index can be used to monitor the inter-temporal competitiveness of a destination.

In spite of the vast and growing literature on tourism demand, outbound tourism remains relatively under-researched. This paper highlights the usefulness of examining determinants of outbound tourism and develops a comprehensive dynamic demand model for international travel from Australia using the panel data cointegration technique. The data represent 47 destinations for the period 1991–2008. The aim is to compute robust demand elasticities. One of the contributions of the paper is that it demonstrates the role immigration plays in determining international tourist departures from Australia. The estimated short-run and long-run immigration elasticities are 0.2 and 0.6, respectively.