Page 1 of 34
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 274
An Econometric Approach To Tourism Demand And Forecast:
Effect Of Fast Urbanization And The Crime Of Kidnapping
Emmanuel Okokondem Okon
Department of Economics,
Kogi State University, Anyiba, Kogi State, Nigeria
Tel:+2348023275716
tonydom57@yahoo.com
Abstract
Tourism is an increasingly vital part of the
Nigeria economy. The country has the highest
urban population and more large cities than in
any other country in sub-Saharan Africa.
Recently, the crime of kidnapping has grown
as an enigma in its body politic. The aim of
this study is to establish an econometric model
in order to explain among other factors the
effect of fast urbanization and the spate of
kidnapping on tourism demand in Nigeria. The
study spans 1990 – 2013. Using the general- to-specific modeling approach, the result
suggest that the one year lag of exchange rate,
human development index, health risk and
crime of kidnapping have significant effect on
tourist arrivals to the country. Interestingly,
urbanization level does not have a significant
influence on tourist arrivals to Nigeria.
Attractions for tourists are both natural and
cultural. The implications of these findings
for tourism decision making are that monetary
authorities in Nigeria should continue to
initiate policies and programmes that will
stabilize naira exchange rate; effort must be
intensified at achieving progress in each of the
HDI indicators; efforts should be directed
toward controlling malaria in the context of a
moderate transmission setting; and
government should improve on national
security and private volunteers should assist
the Nigerian police on information sharing in
the effort to stop the menace of kidnapping. A
forecast for tourist arrivals to Nigeria for the
year 2014 was generated by the study.
Keywords: Urbanization, Crime of Kidnapping,
Tourism Demand, Tourism Forecasting
JEL Classification Numbers: L83, C53
1.0 Introduction
For the first time in history, more
people live now in urban than in rural areas. In
2010, urban areas were home to 3.5 billion
people, or 50.5 per cent of the world‘s
population (DESA, 2011). In the next four
decades, all of the world‘s population growth
is expected to take place in urban areas, which
Page 2 of 34
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 275
will also draw in some of the rural population
through rural to urban migration. Moreover,
most of the expected urban growth will take
place in developing countries, where the urban
population is expected to double, from 2.6
billion in 2010 to 5.2 billion in 2050 (DESA,
2011). In developed countries, the number of
urban dwellers will grow more modestly, from
0.9 million in 2010 to 1.1 billion in 2050
(DESA, 2011). During the same period, the
world‘s rural population will decline by 0.6
billion. By mid-century, however, all regions
will be mostly urban, indeed more than 60
percent urban, according to current
projections. However, the speed of
urbanization is slower now than it was in past
decades in all regions, largely because many
countries have already reached high levels of
urbanization. The rate of urban population
growth is also declining and is expected to
continue declining until 2050, although it is
still very high in Africa, where the urban
population grew at an annual rate of 3.4 per
cent in 2005-2010 (DESA, 2011).
Nigeria witnessed rapid urbanization
since the oil boom of the 1970s. There were
improvements in transportation and mobility.
The country registered the fastest rate of
urbanization in the world, but it did not
translate into a better life for its population. By
1986 Nigeria had an estimated urban growth
rate of 6% (more than twice that of the rural
population) with the percentage of people
living in urban areas estimated to have grown
from 16% to 20% (UNOWA, 2007). In 2010,
more than 40% of the population lived in the
urban centers, whereas this figure was 48% in
2006 (UNOWA, 2007).
In sub-Saharan Africa, Nigeria has the
highest urban population and more large cities
than in any other country; indigenous
populations control the centers, but migrants
from other regions encroach in shantytowns
and protected neighborhoods. Lagos has
teeming central market areas, filth that results
from inadequate housing and public services,
destitution and fear of crime and violence;
criminal violence has become the urban
substitute for insurgency. Large populations
live in overcrowded urban spaces, added to by
continuing migrations and population growth.
All with socio-economic inequality,
deprivation, social disorganization, inadequate
government service as well as dysfunctional
law enforcement willing, at best, to impose
their authoritarian strength and, at worst,
corrupt to the core; crime rates are high and
rising. Crimes against property (thefts,
robberies, burglaries) make up half of the total
crime pool, with assaults and other crimes
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Journal for Studies in Management and Planning
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e-ISSN: 2395-0463
Volume 02 Issue 8
August 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 276
against persons also featuring prominently
(UNOWA, 2007).
In Nigeria, criminalities such as
murder, armed robbery occur on frequent
basis. Recently, the crime of kidnapping has
grown as an enigma in its body politic
(Ikpang, 2011). The spate of kidnappings in
Nigeria has given the country an embarrassing
reputation. Over the past few years, reported
cases of kidnapping in the country have risen,
with many cases remaining unsolved. In some
instances, the victims are never found and the
culprits are never apprehended (Adeyemo,
2012). Acts of kidnapping and hostage-taking
and other forms of social disorder are among
those factors that can affect the patterns of
demand in tourism. As crises events they can
greatly limit the flow of tourists/visitors to a
destination or region. This is especially so
when most of these crimes are targeted on
tourists. Such crises events can go a long way
in diminishing tourism revenues that could
accrue to the destination or region. It is even
stated that such crises events can wipe out
tourism demand (Cook et al, 2006).
However, from economic point of view
urbanization is good as it facilitates
achievement of economies of scale and thus
promotes growth of industries and
development in the economy. However from
social point of view urbanization encourage
crimes as the rate of crime is higher in large
cities and in urbanized areas (Jalil and Iqbal,
2010). There are many theories that have been
developed in the social science literature to
explain criminal behavior. Economists
examine the issue of the crime differently
from other social scientists. Economist believe
that people behave rationally; they maximize
their utility (Mathur, 1978). Specifically, if
one commits crime, it is his rational choice
that he wants to maximize his utility by
committing crime. Since most of the crimes
take place in urban areas, residents of urban
areas fear from being a crime victim and this
could also scare foreign tourist who may be
attracted to a destination by the level of its
urbanization.
This paper therefore attempts to
empirically examine urbanization and
criminalities effect on inbound tourism. The
increasing rate of crime in Nigerian cities
(especially kidnapping) is becoming a source
of concern and tourism is so unpredictable and
volatile in today‘s world any changes, be it
social or otherwise can have a counter effect
on the trends of the industry. Besides
urbanization, other socio-economic factors
which may influence crimes are also taken
