Island S udies Jou nal, 14(2), No embe 2019, pages 61-80
61
Tou ism, smallness and insula i y: a sui able combina ion o
quali y o li e in Small Island De eloping S a es (SIDS)?
Miguel Puig-Cab e a
Facul ad de Tu ismo y Finanzas, Uni e sidad de Se illa, Spain
[email p o ec ed] (co esponding au ho )
Concepción Fo onda-Robles
Facul ad de Tu ismo y Finanzas, Uni e sidad de Se illa, Spain
[email p o ec ed]
Abs ac : As Small Island De eloping S a es (SIDS) u n in o a ocus o a en ion o ou is s
and o eign in es men , ou ism becomes one o he p ima y sou ces o weal h in hese
economies. This inc easing ele ance o ou ism in SIDS in u n becomes an oppo uni y no
only o enhance he esiden s’ quali y o li e bu also o comba he exis ing ulne abili ies o
SIDS. The main goal o his esea ch is o measu e he e ec s o ou ism on he quali y o li e
o esiden s in SIDS acco ding o: 1) he deg ee o ou ism de elopmen , 2) he alloca ion o
public and p i a e esou ces o p omo e he ou ism sec o , and 3) he di ec oppo uni ies
ha ou ism o e s o he popula ions in SIDS. In o de o do so, an empi ical analysis has
been ca ied ou based on a panel da abase con aining da a om 28 SIDS du ing he pe iod
2005-2016. The indings sugges ha ou ism de elopmen becomes a d i ing o ce o
enhancing he esiden s’ quali y o li e. I is also p o en ha go e nmen expendi u e has a
posi i e e ec on he popula ion, wi h a epe cussion ou imes g ea e han ha o p i a e
in es men . Finally, wo k p eca i y appea s o be a eali y in SIDS.
Keywo ds: islands, p i a e in es men , quali y o li e, Small Island De eloping S a es (SIDS),
small economic size, ou ism de elopmen
h ps://doi.o g/10.24043/isj.95 • Recei ed Ma ch 2019, accep ed Augus 2019
© 2019—Ins i u e o Island S udies, Uni e si y o P ince Edwa d Island, Canada.
In oduc ion
Small Island De eloping S a es (SIDS) a e cha ac e ized by hei small size. This condi ion
in insically implies a se ies o ac o s ha make hese des ina ions mo e ulne able, which
a e: a) smallness: he popula ion, land a ea, and/o GDP a e small; b) insula i y and
emo eness: a lack o e ec i e and e icien anspo ; c) being p one o na u al disas e s; d)
en i onmen al ulne abili y and agile ecosys ems; e) dependence on o eign economies; and
) he need o g ea e lexibili y in o de o adap o global changes (B iguglio, 1995; Moghal
& O’Connell, 2018; Naudé e al, 2009).
Miguel Puig-Cab e a & Concepción Fo onda-Robles
62
These ea u es gi e ise o a si ua ion o pe sis en socioeconomic ola ili y (Jackman,
2014; Read, 2018), which condi ions he esiden s’ quali y o li e (QoL) (McAlbe e al, 2005;
Sha ee & McAlee , 2005), and a ulne abili y ha di ec ly ha ms his QoL may be p esen
in mos SIDS i app op ia e measu es a e no aken (Schey ens & Momsen, 2008).
Al hough ou ism ac i i y no doub has a conside able e ec on any des ina ion,
ega dless o i s size, loca ion, and sociopoli ical ci cums ances, ou ism ep esen s an a ea o
s eng h o SIDS. Fo ecas s o he global ou ism ma ke sugges ha by he yea 2030
eme ging des ina ions and SIDS will ha e acqui ed a g ea e ma ke sha e han adi ional
des ina ions (UNWTO, 2018a). In 2014, he SIDS Accele a ed Modali ies o Ac ion
(SAMOA) Pa hway (UN, 2014) ecognized ou ism as an impo an ou e o job c ea ion,
income gene a ion, educa ion, po e y educ ion, and sus ainable de elopmen in hese
economies. Subsequen ly, he Fi s Wo ld Con e ence on Tou ism o De elopmen
(UNWTO, 2016) highligh ed he need o measu e he eal e ec s o ou ism on esiden s’
QoL in eme ging des ina ions so ha some o he main goals o Agenda 2030 migh be achie ed.
The inclusion o ou ism in Agenda 2030 implies he expec a ion ha his ac i i y will
enhance esiden s’ QoL by con ibu ing o he accomplishmen o some o he Sus ainable
De elopmen Goals (SDGs) o SIDS, such as: a) a o dable and clean ene gy (P aene e al,
2018; Su oop e al, 2018); b) a educ ion in inequali y by a ac ing o eign in es men and
ha ing e icien coo dina ion o public ini ia i es (Sa i, 2017); c) ackling clima e change (Hess
& Kelman, 2017; Robinson, 2017); and d) he sus ainable use o ma ine esou ces (Alde e
al, 2018; Kapmeie & Gonçal es, 2018).
QoL can adi ionally be de ined as “ he abili y o people o lead he kind o li e hey
ha e eason o alue. I is he enhancemen o he capabili y o li e be e and iche li es,
h ough mo e eedom and oppo uni y” (Anand & Sen, 2000).
The li e a u e add esses QoL om wo di e en pe spec i es: in e ms o i s objec i e
and i s subjec i e dimension (Ridde s aa e al, 2016). The i s in ol es objec i e p ope ies
such as condi ions and esou ces, which a e independen o a pe son’s awa eness (Ka imi &
B azie , 2016; Lo i & Koohsa i, 2009). The subjec i e o emo ional dimension is composed
o eelings and pe cep ions abou li e based on emo ions (Ande eck & Nyaupane, 2011; Genc,
2012; Uysal e al, 2016).
Gi en he peculia i ies o SIDS, he ou ism-QoL in e ac ion becomes c ucial (McEl oy,
2006; See anah, 2011). Thus, ou ism becomes no only a d i e o he imp o emen o
QoL, bu also an oppo uni y o u n he ulne abili ies o hese economies in o a global
compe i i e ad an age (UNWTO, 2015, 2018b) in o de o boos economic de elopmen .
Wi h only 1% o he wo ld’s popula ion li ing in SIDS, ou ism in hese s a es a ac s
app oxima ely 3.75% o he global sha e, and in many cases accoun s o mo e han 20% o
he na ional GDP (UNWTO, 2015).
The main objec i e o his s udy is o measu e he e ec s o ou ism on esiden s’ QoL
in SIDS acco ding o: 1) he deg ee o ou ism de elopmen , 2) he alloca ion o public and
p i a e esou ces o p omo e he ou ism sec o , and 3) he di ec oppo uni ies ha ou ism
o e s o he popula ions in SIDS. To his end, an empi ical analysis has been ca ied ou based
on a panel da abase con aining da a om 28 SIDS o e he pe iod 2005-2016.
A e his in oduc ion, he e is a li e a u e e iew, oge he wi h a p esen a ion o he
hypo heses o be es ed. The hi d sec ion desc ibes he da a collec ion and he s udy sample
used in his wo k. The ou h sec ion explains he me hods used o ca y ou he panel da a
Island S udies Jou nal, 14(2), No embe 2019, pages 61-80
63
analysis. The i h sec ion con ains he indings o he analysis as well as he discussion o hese
indings; his sec ion also con ains some ecommenda ions o Des ina ion Managemen
O ganiza ions (DMOs). Finally, a se o conclusions is p o ided.
Li e a u e e iew
Due o hei size, SIDS equi e g ea e momen um han o he economies o boos economic
de elopmen (McGilli ay e al, 2010). Nume ous s udies add ess he causal ela ionship
ou ism-QoL in a bidi ec ional ashion. Thus, ou ism is analyzed bo h in e ms o i s e ec s
on esiden s’ QoL (Ande eck & Nyaupane, 2011; Kim e al, 2013; Uysal e al, 2016), and as
a consequence o enhancing QoL (Ridde s aa e al, 2016; Woo e al, 2015; Yu e al, 2016).
Se e al hypo heses ha e been o mula ed in he exis ing li e a u e in o de o analyze
he in e ac ion be ween key elemen s o he ou ism-QoL nexus in SIDS, hese elemen s
being: 1) he deg ee o ou ism de elopmen , 2) he alloca ion o public and p i a e esou ces
o p omo e he ou ism sec o , and 3) he di ec oppo uni ies ha ou ism o e s o he
popula ions in SIDS.
The QoL- ou ism de elopmen (QoL-De elop) in e ac ion
Tou ism has always been associa ed wi h economic de elopmen (Cannonie & Bu ke, 2018;
Chou, 2013; Fahimi e al, 2018), hus a ec ing esiden s’ QoL (Ridde s aa e al, 2016;
Schube e al, 2011).
Some au ho s sugges ha ou ism de elopmen con ibu es o economic p ospe i y
and de elopmen (Read, 2018; Singh, 2008; UNWTO, 2018b). Howe e , o he s s ess ha
his ac i i y ends o agg a a e he po e y o esiden s (Gascón, 2015; Lee e al, 2014;
Schey ens & Russell, 2012) and wo sen hei QoL.
P a (2016) a gues ha while ou ism gene a es a signi ican amoun o economic
ac i i y, he income ha emains in he des ina ions is insubs an ial. Sun ikul e al (2016)
p o ide empi ical e idence a a mic oeconomic le el o he case o Hue (Vie nam), whe e
he esiden s pe cei ed ou ism as an oppo uni y o bene i he communi y as a whole
wi hou i being enough o enhance hei QoL as indi iduals.
In spi e o hese di e en hypo heses, he e is an absolu e consensus on he posi i e
e ec s o he QoL-De elop in e ac ion in small-size economies such as SIDS (UNWTO,
2015). The g ea e he numbe o ou is a i als and he g ea e he subsequen inc ease in
incomes, he mo e posi i e a e he e ec s o his sec o on esiden s’ QoL in hese des ina ions
(Banwayo-Skee e & Skee e, 2015; C oes & Ri e a, 2010; Ridde s aa e al, 2016).
Taking he abo e in o accoun , he QoL-De elop in e ac ion is hypo hesized as:
Hypo hesis 1: Tou ism de elopmen in SIDS con ibu es o esiden s’ QoL in a posi i e way.
The QoL- ou ism p omo ion (QoL-P omo ) in e ac ion
The only way in which ou ism can bene i he popula ion in a des ina ion is by de eloping
ou ism ac i i y. Howe e , his e y de elopmen equi es enough exis ing ou ism
in as uc u e and se ices o ou is s no only o when hey a i e a he des ina ion, bu
also o ul il hei needs du ing he s ay (And ades & Dimanche, 2017). Gi en i s pa icula
cha ac e is ics, his si ua ion in SIDS is e en mo e complex (Moghal & O'Connell, 2018).
Miguel Puig-Cab e a & Concepción Fo onda-Robles
64
The in e en ion o public and p i a e ini ia i e in a des ina ion is a c i ical elemen in
making ou ism possible. Fo example, wi hou ou ism p omo ion, he bene i s o ou ism
would no be accessible o he popula ion. The alloca ion o public o p i a e esou ces o
he ou ism sec o is essen ial (Chou, 2013; Uysal e al, 2016), no only as a con ibu ion o
an imp o emen in QoL, bu also in o de o make a des ina ion mo e compe i i e.
Fo eign in es men is a key componen in he ou ism in as uc u e in SIDS, wi h
mos o he capi al in es men coming om ou side hese economies (UNCTAD, 2018),
which impo no only capi al bu also skills and ITC esou ces (Isik, 2015). Fo example,
SIDS need o de elop an e ec i e anspo in as uc u e so ha ou ism can be de eloped
by esiden s (Pen elow & Sco , 2011), o ha e a i s - a e ho el (P ayag e al, 2010).
In addi ion, e ec i e ou ism policies and special g an s a e needed o ensu e ha he
local communi y can bene i om he ou ism sec o (Sha pley & Ussi, 2014).
To pu i sho ly, unless he e a e enough ou ism acili ies and se ices in a des ina ion,
ou ism will no be able o unc ion p ope ly.
The QoL-P omo in e ac ion is supposed o a ec he popula ions in SIDS posi i ely, by
p o iding he means by which ou ism can be made a eali y and he des ina ions can be made
mo e compe i i e (C oes, 2013; C ouch & Ri chie, 2012):
Hypo hesis 2: As ou ism p omo ion in SIDS inc eases, so does he esiden s’ access
o bene i s, his enhancing hei QoL.
The QoL- job oppo uni ies (QoL-Oppo ) in e ac ion
Tou ism acoun s o one in e e y 12 jobs wo ldwide, ei he di ec ly o indi ec ly (UNWTO,
2018b). Some s udies ha e analyzed he ou ism-QoL nexus in e ms o he numbe o
oppo uni ies (jobs) ha ou ism o e s o esiden s (Ande eck & Nyaupane, 2011; Libu d e
al, 2012) in eme ging des ina ions. O he s, howe e , claim ha he e idence p o ided is
ques ionable, as hese jobs imme se wo ke s in a p eca ious en i onmen (Sun ikul e al,
2016), and may imply low wages, long wo king days, s ess ul condi ions, and ew
oppo uni ies o p omo ion (Lee e al, 2014).
In he case o SIDS, ou ism is included in he co esponding policy agendas (Shakeela
e al, 2011) as a way o imp o ing esiden s’ QoL by c ea ing new jobs.
The ou ism sec o also con ibu es o building and s eng hening alue chains wi h
o he ac i i ies in a des ina ion, such as ag icul u e o handic a s. In small economies like
SIDS, his mul iplie e ec can be e en mo e ewa ding (UNWTO, 2015).
Fo he pu pose o he cu en s udy, he QoL-Oppo in e ac ion is supposed o be
bene icial o he esiden s o SIDS:
Hypo hesis 3: The mo e he numbe o jobs ela ed o he ou ism sec o inc eases in
SIDS, he mo e he esiden s’ QoL is enhanced as hey a e o e ed new oppo uni ies.
Da a
The e ec s o ou ism on SIDS a e s ill dispu ed in he academic communi y (P a , 2015).
In o de o clea ly de ine and esol e his dilemma, he cu en empi ical analysis co e s he
pe iod 2005-2016 and con as s he e ec s o ou ism on he QoL o he popula ions o SIDS.
Island S udies Jou nal, 14(2), No embe 2019, pages 61-80
65
Al hough he ime pe iod o he esea ch con ains h ee di e en economic cycles (p e-
c isis, inancial c isis, and pos -c isis), i has been assumed ha ou ism is a esilien sec o
(Cellini & Cuccia, 2015), which means ha ega dless o he global mac oeconomic si ua ion,
i ends o g ow g adually (WTTC, 2016).
Podho ecka (2018) s a es ha in spi e o he global ecession in he ou ism ma ke , in
he case o SIDS he e has been an inc ease a he han a dec ease in he numbe o ou is s
and expendi u e, and e en he numbe o jobs linked o his sec o .
An inno a ion o his esea ch is ha i goes beyond a s ic ly mone a y ision o one
o economic de elopmen analyzed om a mul idimensional pe spec i e (UNDP, 2018) ha
conce ns he popula ion’s access o a be e s anda d o li ing, as well as o wha ex en i s
educa ional and heal h needs a e co e ed.
S udy sample
Based on UN (2018) classi ica ion, a panel da a analysis was ca ied ou o 28 SIDS
wo ldwide, all o which a e UN membe s a es, o he pe iod 2005-2016.
Figu e 1: S udy sample.
The s udy sample used o his esea ch was de ined by da a a ailabili y (Figu e 1). Thus,
100% o he SIDS analyzed a e UN membe s a es (28 ou o he 38 exis ing SIDS ha a e
membe s a es). The co e age o his esea ch is wo ldwide, and includes SIDS om he
Miguel Puig-Cab e a & Concepción Fo onda-Robles
66
A lan ic Ocean, he Indian Ocean, he Medi e anean Sea, he Sou h China Sea, he
Ca ibbean and he Paci ic Ocean.
Al hough no all island s a es a e consolida ed ou ism des ina ions, he main
con ibu ion o his pape is o show ha , in gene al, ou ism ac i i y con ibu es o an
imp o emen in he QoL o hose island s a es no only in economic, bu also in socie al and
heal h e ms.
Desc ip ion o a iables
The a iables used in his analysis ha e been included based on hei sui abili y o measu ing
he way in which he ou ism phenomenon a ec s esiden s’ QoL acco ding o: 1) he deg ee
o ou ism de elopmen , 2) he p omo ion o his ac i i y by public and p i a e ini ia i es,
and 3) he di ec oppo uni ies ha i o e s o esiden s (Figu e 2).
Figu e 2: Concep ual scheme o ou ism and QoL.
The Human De elopmen Index (HDI) was ob ained om he Uni ed Na ions
De elopmen P og amme (UNDP, 2018) in o de o measu e he QoL achie ed by he
popula ions in he chosen ime ho izon (2005-2016). Acco ding o Anand and Sen’s (2000)
s a emen , his index was c ea ed as a p oxy o QoL, by measu ing longe i y, educa ion, and
“command o e esou ces o enjoy a decen s anda d o li ing” (UNDP, 1990). Thus, he
cons uc o QoL in his esea ch is based on a h ee-dimensional app oach: income,
educa ion and heal h (Haq & Zia, 2013). Since he HDI is a adi ional and accep ed indica o
o measu ing QoL (Rahman e al, 2005), i is used in esea ch in di e en sec o s, such as
ade (Da ies & Quinli an, 2006) o ou ism (Kubicko a e al, 2017).
The alues o he HDI ange om 0 o 1 poin , wi h 0 ep esen ing he si ua ion closes
o unde de elopmen (low s anda d o li ing, and unsa is ied educa ional and heal h needs),
and 1 he si ua ion o maximum de elopmen (high s anda d o li ing, and educa ional and
heal h needs a e me ).
In o de o analyze ou ism de elopmen in SIDS, wo a iables ha e been included:
Tou ism A i als (TA) and Tou ism GDP (TGDP). TA was ex ac ed om UNWTO’s (2018a)
Compendium o S a is ics o all he pe iods conside ed in his esea ch. This a iable quan i ies
he o al amoun o ou is s heading o SIDS pe yea . TGDP was chosen as an indica o ha
Island S udies Jou nal, 14(2), No embe 2019, pages 61-80
67
ep esen s he ele ance o ou ism wi hin he whole economy o SIDS. The TGDP da a was
aken om he WTTC (2018) da abase in billions (bn) o US dolla s ( eal p ices).
The p omo ion o ou ism by ac o s in SIDS has been measu ed om bo h a public and
a p i a e pe spec i e: P i a e In es men in Tou ism (PI) and Go e nmen Tou ism Expendi u es
(GTE). PI includes capi al in es men spen by any o he indus ies di ec ly in ol ed in he
ou ism sec o (e.g., anspo in as uc u e, accommoda ion, and es au an s). GTE e e s o
go e nmen spending on ou ism se ices o wo ypes: cul u al (e.g., cul u al si es and
museums) and na u al (e.g., na ional pa ks and o he na u al a ac ions). Bo h a iables we e
ex ac ed om he WTTC (2018) da abase in billions (bn) o US dolla s ( eal p ices).
The e a e wo o he a iables ha ha e been included in he empi ical analysis: Di ec
Con ibu ion o Tou ism o Employmen (Di E) and he Economic F eedom Index (EFI).
Di E measu es he numbe o oppo uni ies (jobs) gene a ed by ou ism de elopmen . The
EFI is an index ha e lec s he poli ical and economic si ua ion in SIDS, wi h 0 ep esen ing
he leas ee si ua ion, and 100 he ees . The la e a iable is used in his esea ch as a p oxy.
Di E was aken om he WTTC (2018) da abase in housands o jobs, while he EFI was
aken om he He i age Founda ion (2018).
Table 1: Summa y s a is ics o he a iables used in he eg essions.
Mean
S d. De .
Min.
Max.
Obs.
HDI
0.673
0.108
0.396
0.930
336
TA*
12.300
1.771
8.268
16.373
336
TGDP
*
-0.669
1.718
-4.605
3.412
336
PI*
-2.475
1.608
-4.715
2.683
336
GTE*
-1.215
1.809
-4.605
2.721
336
Di E*
2.684
1.443
-0.011
5.314
336
EFI
-0.089
5.374
-41.8
32.8
336
* Va iables con e ed o na u al logs in he analysis.
Me hods
Reg ession model
P e ious s udies sugges ha ou ism con ibu es o enhancing he QoL o a des ina ion’s
esiden s (Pilking on e al, 2017; Tel e & Sha pley, 2016; UNWTO, 2018b). The li e a u e
also a gues ha economy size plays a key ole in ou ism and de elopmen (UNWTO, 2015,
2018b): he smalle he economy, he g ea e i s con ibu ion o enhancing he esiden s’ QoL
(Chou, 2013; D i sakis, 2012).
Acco ding o he hypo heses o mula ed in p e ious sec ions, he ollowing unc ional
ela ionships ha e been pu o wa d:
𝑄𝑄𝑄𝑄𝑄𝑄𝑖𝑖𝑖𝑖 =𝑓𝑓(𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝑄𝑄𝐷𝐷𝑖𝑖𝑖𝑖,𝑃𝑃𝑃𝑃𝑄𝑄𝑃𝑃𝑄𝑄𝑃𝑃𝑖𝑖𝑖𝑖,𝑂𝑂𝐷𝐷𝐷𝐷𝑄𝑄𝑃𝑃𝑃𝑃𝑖𝑖𝑖𝑖) (1
Whe e QoL is he quali y o li e o he popula ion in SIDS; De elop measu es he deg ee o
de elopmen o ou ism ac i i y; P omo e alua es he p omo ion o ou ism by public and
Miguel Puig-Cab e a & Concepción Fo onda-Robles
68
p i a e ini ia i es; Oppo is he di ec job oppo uni ies ha ou ism o e s o esiden s; while
i is a subindex ha e e s o he s udy sample (a o al o 28 SIDS) and is a subindex ha e e s
o he pe iod o ime co e ed in his esea ch (2005-2016).
Based on Equa ion 1, a panel da a analysis was ca ied ou on 28 SIDS o he pe iod
2005-2016 using he o dinal leas squa e (OLS) me hod:
𝐻𝐻𝐷𝐷𝐻𝐻 =𝐴𝐴𝑖𝑖𝑖𝑖 +β₁𝑇𝑇𝐴𝐴𝑖𝑖𝑖𝑖 +β₂𝑇𝑇𝑇𝑇𝐷𝐷𝑃𝑃𝑖𝑖𝑖𝑖 + β₃𝑃𝑃𝐻𝐻𝑖𝑖𝑖𝑖 + β₄𝑇𝑇𝑇𝑇𝐺𝐺𝑖𝑖𝑖𝑖 + β₅𝐷𝐷𝐷𝐷𝑃𝑃𝐺𝐺𝑖𝑖𝑖𝑖 +𝐷𝐷𝑖𝑖𝑖𝑖 (2
Whe e HDI s ands o he Human De elopmen Index; TA o Tou ism A i als; TGDP o
Tou ism GDP; PI o P i a e In es men o Capi al in Tou ism; GTE o Go e nmen
Tou ism Expendi u es; Di E o Di ec Con ibu ion o ou ism o Employmen ; A is he
sum o indi idual and empo al e ec s; and e ep esen s he e o e m.
Tou ism esea ch uses TA and TGDP as key a iables o measu e he ele ance o
ou ism in a des ina ion (Ha iz e al, 2017; Khan e al, 2017; Pulido-Fe nández e al, 2015)
and in SIDS (Cannonie & Bu ke, 2018; Sha ee & McAlee , 2005). Thus, in he cu en
s udy hese wo a iables a e used o ep esen ou ism de elopmen in SIDS (De elop in
Equa ion 1).
In o de o measu e he p omo ion o ou ism (P omo in Equa ion 1) in SIDS, wo
a iables ha e been used in his esea ch o p i a e and hen public ini ia i e: PI is conside ed
o be an impo an componen in ou ism de elopmen esea ch o he e alua ion o he
e ec s o p i a e in es men on he popula ion (Tang & Abosed a, 2016), especially in SIDS
(Du y e al, 2016; Fauzel e al 2017); and GTE is a c ucial a iable ha measu es he e ec s
o go e nmen ou ism expendi u es on he esiden s o SIDS (Bane jee e al, 2015).
Di E is used in ou ism and de elopmen esea ch as an indica o o e alua e he eal
oppo uni ies (Oppo in Equa ion 1) o esiden s o gain access o a be e QoL in SIDS
(Baum, 2012; Lee e al, 2014; Schey ens & Russell, 2012).
Napie ian loga i hmic ans o ma ion (Ln) was used o induce s a iona i y in he ime
se ies, hus assu ing ha he s a is ical p ope ies a e all cons an o e ime. This implies
Equa ion 1 being ans o med in o a le el-log model (G ampella e al, 2016). In addi ion, a
deep analysis o he p ope ies o he se ies was ca ied ou . Pesa an’s (2004) c oss-sec ional
dependence, as well as his uni oo (Pesa an, 2007) and coin eg a ion (Wes e lund, 2008),
was es ed. The s a iona i y es was unde aken in bo h o i s o ms: le el and i s di e ence.
The i s di e ence o m (Δ) was used o ob ain be e pa ame e es ima es o Equa ion 1:
𝐻𝐻𝐷𝐷𝐻𝐻 =𝐴𝐴𝑖𝑖𝑖𝑖 +β₁Ln𝑇𝑇𝐴𝐴𝑖𝑖𝑖𝑖 +β₂𝑄𝑄𝐿𝐿𝑇𝑇𝑇𝑇𝐷𝐷𝑃𝑃𝑖𝑖𝑖𝑖 + β₃Ln𝑃𝑃𝐻𝐻𝑖𝑖𝑖𝑖 + β₄𝑄𝑄𝐿𝐿𝑇𝑇𝑇𝑇𝐺𝐺𝑖𝑖𝑖𝑖 + β₅𝑄𝑄𝐿𝐿𝐷𝐷𝐷𝐷𝑃𝑃𝐺𝐺𝑖𝑖𝑖𝑖 +𝐷𝐷𝑖𝑖𝑖𝑖 (3)
The me hod used in Equa ion 2 was panel-co ec ed s anda d e o s (PCSE), in o de
o sol e issues o con empo aneous co ela ion (Du ou & Khala , 2003), he e oskedas ici y
(Whi e, 1980) and au oco ela ion (And ews, 1991) among a iables. Beck and Ka z (1995)
showed ha he PCSE me hod o e s mo e p ecise esul s han he so-called easible
gene alized leas squa e (FGLS) es ima o . Mul icollinea i y among he explana o y a iables
was also analyzed, in his case by using he alues o he a iance in la ion ac o s (VIFs).
Island S udies Jou nal, 14(2), No embe 2019, pages 61-80
69
Table 2: Va iance in la ion ac o s.
The highe he VIF alues, he g ea e he p obabili y o exis ing mul icollinea i y.
E en hough a VIF alue <10 is accep able o p o ing a lack o mul icollinea i y, he VIF
alues o all o he a iables in he model a e <3 (Table 2), in his way con o ming o a s ic e
c i e ion (Hai e al, 1995).
Resul s and discussion
All o he eg ession coe icien s in Equa ion 3 a e signi ican a le el 0.01, excep o LnGE,
which is signi ican a le el 0.05 (Table 3).
The Wald chi-squa e s a is ics es (P ob>chi2= 0.0000) con i ms ha he null
hypo hesis is o be ejec ed, which means ha none o he eg ession coe icien s in he model
a e equal o ze o. The es hus concludes ha all o he a iables included in he model a e
no simul aneously equal o ze o, as he es c ea es a s a is ically signi ican enhancemen in
he i o he model.
Acco ding o he de e mina ion coe icien (R2=0.651), i is o be con i med ha a
65.1% a ia ion o HDI can be explained by he X co a ia es. Con empo aneous co ela ion,
he e oskedas ici y and au oco ela ion among a iables we e co ec ed using he PCSE
me hod. I is hus con i med ha he model is alid.
Table 3: Resul s o es ima ions.
Coe icien
S anda d E o
a
P>
|
z
|
LnTA
0.011***
0.0012
0.000
LnTGDP
0.009***
0.0025
0.001
LnPI
0.001***
0.0007
0.005
LnGTE
0.006**
0.0021
0.013
LnDi E
-0.009***
0.0025
0.005
R
2
0.651
Wald chi2
46.32
P ob>chi2
0.0000
aRobus s anda d e o s o he e oskedas ici y and se ial co ela ion
*p<0.1; **p<0.05; ***p<0.01.
The indings con i m ha ou ism con ibu es o he enhancemen o QoL in SIDS, as
o he s udies ha e assumed (Cannonie & Bu ke, 2018; Fauzel e al, 2017; See anah, 2011).
Va iables
VIF (Va iables)
LnTA
1.11
LnTGDP
2.29
LnPI
1.14
LnGTE
2.46
LnDi E
2.59
Mean VIF
1.95
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