The Amazon rainforest is one of the world's greatest natural wonders and holds great
importance and significance for the world's environmental balance. Around 60% of the
Amazon rainforest is located in the Brazilian territory. The two biggest states of the
Amazon region are Amazonas (the upper Amazon) and Para (the lower Amazon), which
together account for around 73% of the Brazilian Legal Amazon, and are the only states
that are serviced by international airports in Brazil's North region. The purpose of this
paper is to model and forecast sustainable international tourism demand for the states of
Amazonas, Para, and the aggregate of the two states. By sustainable tourism is meant a
distinctive type of tourism that has relatively low environmental and cultural impacts.
Economic progress brought about by illegal wood extraction and commercial
agriculture has destroyed large areas of the Amazon rainforest. The sustainable tourism
industry has the potential to contribute to the economic development of the Amazon
region without destroying the rainforest. The paper presents unit root tests for monthly
and annual data, estimates alternative time series models and conditional volatility
models of the shocks to international tourist arrivals, and provides forecasts for 2006
and 2007.
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