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Influence of Uncertain Demand on Product Variety: Evidence from the International Tourist Hotel Industry in Taiwan

Author

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  • Chiang-Ming Chen

    (Department of Economics, National Chi Nan University, Taiwan)

  • Chia-Yu Yeh

    (Department of Economics, National Chi Nan University, 1 University Road, Puli, Nantou 54561, Taiwan)

  • Jin-Li Hu

    (Institute of Business and Management, National Chiao Tung University, Taiwan)

Abstract

Hotels provide many different types of rooms in terms of capacity as well as quality to diversify their products. This paper examines the relationship of uncertain demand and product variety by using monthly operation data from international tourist hotels in Taiwan during 2007–2009. First, the authors apply the two-stage least squares (2SLS) and random-coefficients models to estimate the demand function in Taiwan's international tourist hotel industry. They then examine the relationship between uncertain demand and product variety. The empirical results indicate that the market's uncertain demand significantly induces the hotels to expand their product variety.

Suggested Citation

  • Chiang-Ming Chen & Chia-Yu Yeh & Jin-Li Hu, 2011. "Influence of Uncertain Demand on Product Variety: Evidence from the International Tourist Hotel Industry in Taiwan," Tourism Economics, , vol. 17(6), pages 1275-1285, December.
    • Handle: RePEc:sae:toueco:v:17:y:2011:i:6:p:1275-1285
    DOI: 10.5367/te.2011.0089
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    References listed on IDEAS

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    4. Kai-Lung Hui, 2004. "Product Variety Under Brand Influence: An Empirical Investigation of Personal Computer Demand," Management Science, INFORMS, vol. 50(5), pages 686-700, May.
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    6. Dennis W. Carlton & James D. Dana, 2008. "Product Variety And Demand Uncertainty: Why Markups Vary With Quality," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 535-552, September.
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    Cited by:

    1. Chiang-Ming Chen & Yu-Chen Lin & Yi-Chun Tsai, 2015. "How Does Advertising Affect the Price Elasticity of Lodging Demand? Evidence from Taiwan," Tourism Economics, , vol. 21(5), pages 1035-1045, October.
    2. Manuel Rodríguez-Díaz & Crina Isabel Rodríguez-Voltes & Ana Cristina Rodríguez-Voltes, 2019. "Determining the Relationships between Price and Online Reputation in Lodgings," Administrative Sciences, MDPI, vol. 9(3), pages 1-27, July.
    3. Xin Long Xu & Chao Sun & Yi Li & Nidi Zhou, 2020. "The Effects of Environmental Management and Debt Financing on Sustainable Financial Growth in the Tourism Industry," SAGE Open, , vol. 10(3), pages 21582440209, August.
    4. Chiang-Ming Chen & Hsien-Hung Chiu, 2014. "Research Note: Market Disequilibrium Effect on Hotel Prices," Tourism Economics, , vol. 20(4), pages 901-909, August.
    5. Chiang-Ming Chen & Kuo-Liang Chang, 2012. "Effect of Price Instability on Hotel Profitability," Tourism Economics, , vol. 18(6), pages 1351-1360, December.
    6. Chiang-Ming Chen & Yu-Chen Lin & Yu-Hsun Liao, 2014. "Research Note: Revenue and Labour Demand in the Hotel Industry: An Investigation of Endogeneity," Tourism Economics, , vol. 20(2), pages 439-446, April.

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