Modelling Business Travel

Business travel is important and yet very few attempts have been made to model it. The aim of this study is to identify those economic variables that are most important in influencing business trips to Australia from four of Australia's most important travel and trade partners. Using a standard demand modelling approach suitably modified to deal with the motivations for business trips, Johansen's Full Information Maximum Likelihood technique is used to estimate the long-run relationship between business travel and its explanators. We find that the importance of the economic variables varies from country to country, although overall openness to trade and origin country real income are important variables explaining business travel.