Evaluating Short-Run Price Elasticity of Domestic and International Visitors at the Taj Mahal after the 2019 Fee Increase

Abstract

This research evaluates the short-run price elasticity of demand for domestic and international visitors at the Taj Mahal following the significant entry-fee increase implemented by the Archaeological Survey of India (ASI) in January 2019. Leveraging a natural experimental approach and employing a difference-in- differences regression methodology, this study analyzes actual visitation data from 2015 to 2020, carefully controlling for factors such as income growth, seasonal variations, and extraordinary events. The results reveal that domestic visitors exhibited moderate price sensitivity (price elasticity: -0.29), indicating a measurable but modest reduction in visitation following the fee hike. In contrast, international visitors demonstrated minimal price sensitivity (price elasticity: -0.15), suggesting that the increase had a negligible impact on their decision to visit. These findings confirm differential price elasticity between visitor segments and underscore the Taj Mahal's unique status as an irreplaceable heritage attraction. This study contributes to tourism economics literature and offers practical insights for policymakers regarding optimal pricing strategies, balancing revenue generation with sustainable visitor management.