airlines, which would keep ticket prices competitive. Tourists, on the other hand, might place greater value on having nonstop flights to their destination. Alternatively, a minister of tourism in the Caribbean might be more interested in sheer volume, i.e., frequency of flights and number of seats. Or one could simply conclude that all factors are equally important. This paper seeks to determine the relative importance of different airlift supply factors for U.S tourist arrivals to the Caribbean, namely the number of flights, seats, airlines, and departure cities with
airlines. 9 Figure 3.8. U.S.-Caribbean Flights by Departing Cities and Airlines, 1990–2014 Sources: Air Carrier Financial Reports from United States Department of Transportation; and authors’ calculations. Estimation Results To identify the effects of the different airlift supply factors on U.S. tourist arrivals to each Caribbean destination, a structural vector autoregression model (SVAR) is used. The SVAR model enables the disentangling of the reverse causality between tourist arrivals and airlift factors in which tourist arrivals are not only