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Domestic Price, (Expected) Foreign Price, and Travel Spending by Canadians in the United States

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  • Jan Vilasuso
  • Fredric C. Menz

Abstract

In this paper, the authors develop and test a model to explain travel expenditures in the United States by Canadians. The model examines a consumer's choice problem where income is allocated between domestic and foreign consumption. Consumers do not know the foreign price level and base their spending in part on expected foreign price. In addition to expected foreign price, domestic price, exchange rates, income, and foreign price uncertainty influence travel spending. Empirically, each determinant is statistically significant. The contribution of each determinant, however, is not the same: Canadian prices and the exchange rate are the primary factors influencing Canadian travel spending.

Suggested Citation

  • Jan Vilasuso & Fredric C. Menz, 1998. "Domestic Price, (Expected) Foreign Price, and Travel Spending by Canadians in the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1139-1153, November.
    • Handle: RePEc:cje:issued:v:31:y:1998:i:5:p:1139-1153
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    Cited by:

    1. Neiman, Brent & Swagel, Phillip, 2009. "The impact of post-9/11 visa policies on travel to the United States," Journal of International Economics, Elsevier, vol. 78(1), pages 86-99, June.
    2. Ding Ding & Mr. Yannick Timmer, 2022. "Exchange Rate Elasticities of International Tourism and the Role of Dominant Currency Pricing," IMF Working Papers 2022/024, International Monetary Fund.
    3. Ding, Ding & Timmer, Yannick, 2023. "Exchange rate elasticities of international tourism and the role of dominant currency pricing," Journal of International Money and Finance, Elsevier, vol. 137(C).
    4. Tekleselassie, Tsegay Gebrekidan, 2016. "Three essays on the impact of institutions and policies on socio-economic outcomes," Economics PhD Theses 1316, Department of Economics, University of Sussex Business School.
    5. Barry Reilly & Tsegay Gebrekidan Tekleselassie, 2018. "The role of United States Visa Waiver Program on cross-border travel," Applied Economics Letters, Taylor & Francis Journals, vol. 25(1), pages 61-65, January.
    6. Ding Ding & Yannick Timmer, 2022. "Exchange Rate Elasticities of International Tourism and the Role of Dominant Currency Pricing," CESifo Working Paper Series 9743, CESifo.

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