Does crime-tourism nexus hold for Pakistan?

Abstract

PurposeThe primary objective of this study is to investigate the linkage of tourism and crime for Pakistan along with exchange rates, terrorism and domestic prices in the presence of structural breaks over the period 1984–2017.Design/methodology/approachThe order of integration is tested through ADF and PP unit root tests. The robustness of unit root test is testified via structural break unit root test. Furthermore, the authors use Bayer and Hanck (2013) combined cointegration test to confirm the existence of a long-term theoretical relationship among the variables. For the robustness of cointegration analysis, the authors also employ ARDL bound testing in the presence of structural break years. Moving forward, the authors apply VECM Granger causality to find out the direction of causality. Subsequently, variance decomposition approach and impulse response function are used to distinguish leader from the followers.FindingsThe unit root test shows that the order of integration is one, I(1). The cointegration analysis confirms the long-run relationship between underlying variables. The authors find inverse and significant impact of crime and exchange rate on tourism in the long run. On contrary, domestic prices play a positive and significant role to determine tourism in short and long run. Also, terrorism is found to be insignificant with negative impact. Further, the bidirectional causality between crime and tourism is observed in the long run. Similarly, unidirectional causality from terrorism to exchange and exchange rate to domestic price is observed in the short run.Originality/valueThe contemporary studies on crime-tourism nexus offer limited evidence, as they frequently suffer from omitted variable bias and ignore possible endogeneity issues. This study uses vector autoregressive models to overcome these biases. Similarly, the authors accommodate the role of structural break years through their analysis. Hence, the results offer more credible evidence. Moreover, the authors contribute to the existing tourism demand literature by adding crime as a potential determinate in case of Pakistan.

Revisiting the Relationship Between Tourism and Crime Based on a Dynamic Spatial Durbin Model

“…The tourism industry is also labor intensive, which provides job opportunities for numerous unskilled and surplus laborers, in addition to improving the quality of life of residents. Therefore, an increase in tourist activities promotes economic growth, creates more job opportunities for residents, thereby decreasing crime rates (Ahad et al, 2021; Gould et al, 2002). In our study, the tourism industry of most cities in Sichuan Province—which is different from the mature tourism markets of Western countries—is in the early and rapid development stage.…”

“…The first viewpoint argues that tourism can serve as a strong motivation to commit crime, which has been empirically supported by numerous studies (Ahad et al, 2021;Fujii & Mak, 1979;Recher & Rubil, 2020;Walmsley et al, 1983). McPheters and Stronge (1974) examined the relationship between seasonal tourism in Miami and property crimes and found a significant relationship between seasonal tourism and property crime (including robbery larceny and burglary).…”

“…They observed a significantly negative influence of crime on tourist arrivals in both the long and short term. Likewise, Ahad et al (2021) investigated the crime-tourism nexus in Pakistan and found a significant impact of crime on tourism development.…”

“…Furthermore, some scholars suggest that tourist-focused criminal activities are related to structural characteristics, such as opacity, ambiguity, and duality of the destination (Ahad et al, 2021;Cohen, 1996). Additionally, the high frequency of crime in one destination may be attributed to the temporary and spatial effects of special events, which provide environmental opportunities for criminal offenses (Barker et al, 2002).…”

An investigation on the natural rate of crime rates with Fourier panel unit root test in selected emerging economies

“…Foreign direct investment, which is essential for long-term economic growth, is excluded from the market as crime rates rise (Brown and Hibbert, 2017;Cabral et al, 2019). Criminal activity has a detrimental impact on the number of tourists and tourism revenues (Ahad et al, 2022;Fourie et al, 2020;Ulucak and Y€ ucel, 2021). Also, the growing security concerns have negative consequences in the real estate market (Ceccato and Wilhelmsson, 2020;de Graaff, 2021).…”