Tourism-led food inflation: Exploring economic drivers and long-term impacts in Turkey

Food is not only a basic need but also a vital component of the tourist experience and a strategic element in enhancing destination attractiveness. The literature suggests that about one-third of tourist expenditures are on food. The issue of tourism-induced food inflation is timely and important, especially considering the post-pandemic inflationary environment and the recovery in global tourism. Turkey is an appropriate case study due to its high dependence on tourism and significant food inflation. This paper aims to empirically examine tourism-driven food inflation in Turkey over a lengthy period, 2005 (1) – 2024 (12). In this study, the Gregory and Hansen cointegration test, which investigates the cointegration relationship under a structural break, is used, and the long-run relationship between the series is estimated using FMOLS and CCR methods. The results confirm a long-run relationship between tourism arrivals and food price inflation. Moreover, oil prices, water, electricity, and natural gas prices increase, and income is found to have significant effects on tourism-food prices. Although tourism arrivals caused an increase in food prices, this effect is not as high as expected because food prices exhibit higher volatility due to more inelasticity in their supply and demand relative to other consumer goods.