European Scientific Journal December 2016 edition vol.12, No.35 ISSN: 1857 – 7881 (Print) e - ISSN 1857- 7431 59 The Effect of Tourism Investments on Tourism Income in Turkey: Panel VAR Approach Selahattin Guris Ebru Caglayan-Akay Marmara University, Faculty of Economics, Department of Econometrics, Istanbul Filiz Cakir-Zeytinoglu Marmara University, Vocational School of Social Sciences, Department of Tourism and Hotel Management, Istanbul Irem Sacakli-Sacildi Marmara University, Faculty of Economics, Department of Econometrics, Istanbul Cuneyt Sadic Marmara University, Vocational School of Social Sciences , Department of Tourism and Hotel Management, Istanbul doi: 10.19044/esj.2016.v12n35p59 URL:http://dx.doi.org/10.19044/esj.2016.v12n35p59 Abstract Tourism is rapidly developing around the world and it effects the economic, social and cultural development of the country. In this study based on the effect of tourism on the economic growth, the effect of tourism investments on tourism income was examined using Panel VAR model. The yearly data from the period 2001-2014 on the most popular touristic towns in Turkey, namely, Antalya, Mugla, Izmir, Aydin and Nevsehir, was used. When the results of the analysis are examined, it can be said that tourism investments have stimulating effect on tourism income, but it was noticed that the tourism investments from the last year had a decreasing effect on tourism income. Keywords: Tourism investments, Panel Cointegration, Panel Vector Autoregression Introduction Tourism is one of the most important sectors in world economy. Tourism industry is rapidly developing and, besides stimulating all the economic and socio-cultural development of the country, it has a great potential for creating new work places and providing foreign currency