IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v21y2015i2p357-367.html
   My bibliography  Save this article

On the Relationship between Length of Stay and Total Trip Expenditures: A Case Study of Instrumental Variable (IV) Regression Analysis

Author

Listed:
  • Christer Thrane

    (Faculty of Economics and Organization Science, Lillehammer University College, Box 952, 2604 Lillehammer, Norway)

Abstract

The relationship between length of stay (LOS) and total trip expenditures (TTE) has been scrutinized many times within a micro-econometric framework, usually by means of ordinary least squares (OLS) regression analysis. The author questions this practice because much evidence suggests that LOS is an ‘endogenous' independent variable. One of the basic assumptions of OLS regression is thus violated, and a new method — instrumental variable (IV) regression — is called for to produce a consistent, unbiased estimate of LOS. A non-technical case study on IV regression shows that the LOS—TTE relationship estimated by IV regression analysis is only about half the analogue OLS estimate. The study concludes with several important implications for the statistical modelling of micro-level tourism expenditures and for cross-sectional regression-based tourism studies in general.

Suggested Citation

  • Christer Thrane, 2015. "On the Relationship between Length of Stay and Total Trip Expenditures: A Case Study of Instrumental Variable (IV) Regression Analysis," Tourism Economics, , vol. 21(2), pages 357-367, April.
    • Handle: RePEc:sae:toueco:v:21:y:2015:i:2:p:357-367
    DOI: 10.5367/te.2014.0357
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5367/te.2014.0357
    Download Restriction: no
    File URL: https://libkey.io/10.5367/te.2014.0357?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, March.
    2. Carlos Santos & José Cabral Vieira, 2012. "An Analysis of Visitors' Expenditures in a Tourist Destination: OLS, Quantile Regression and Instrumental Variable Estimators," Tourism Economics, , vol. 18(3), pages 555-576, June.
    3. Luiz Pinto Machado, 2010. "Does Destination Image Influence the Length of Stay in a Tourism Destination?," Tourism Economics, , vol. 16(2), pages 443-456, June.
    4. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413.
    5. Peter Fredman, 2008. "Determinants of Visitor Expenditures in Mountain Tourism," Tourism Economics, , vol. 14(2), pages 297-311, June.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    7. Carl H. Marcussen, 2011. "Determinants of Tourist Spending in Cross-Sectional Studies and at Danish Destinations," Tourism Economics, , vol. 17(4), pages 833-855, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Faruk Urak & Nihat Küçük & Abdulbaki Bilgiç & Steven T Yen, 2023. "Modeling censored tourism expenditures in Turkey with non-normal and heteroscedastic errors: An application of the inverse hyperbolic sine double-hurdle model," Tourism Economics, , vol. 29(3), pages 718-741, May.
    2. Christer Thrane, 2016. "Analysing related choices in tourism research," Tourism Economics, , vol. 22(3), pages 527-542, June.
    3. Glauber Eduardo de Oliveira Santos, 2016. "An efficient method for modelling tourists’ length of stay," Tourism Economics, , vol. 22(6), pages 1367-1379, December.
    4. Urszula Markowska-Przybyła, 2020. "Does Social Capital Matter for Total Factor Productivity? Exploratory Evidence from Poland," Sustainability, MDPI, vol. 12(23), pages 1-25, November.
    5. Yeongbae Choe & Hany Kim & Hyo-Jae Joun, 2019. "Differences in Tourist Behaviors across the Seasons: The Case of Northern Indiana," Sustainability, MDPI, vol. 11(16), pages 1-16, August.
    6. Mayer Marius & Vogt Luisa, 2016. "Economic effects of tourism and its influencing factors: An overview focusing on the spending determinants of visitors," Zeitschrift für Tourismuswissenschaft, De Gruyter, vol. 8(2), pages 169-198, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jorge V Pérez-Rodríguez & Francisco Ledesma-Rodríguez, 2021. "Unconditional quantile regression and tourism expenditure: The case of the Canary Islands," Tourism Economics, , vol. 27(4), pages 626-648, June.
    2. Marius Mehrl & Paul W. Thurner, 2020. "Military Technology and Human Loss in Intrastate Conflict: The Conditional Impact of Arms Imports," Journal of Conflict Resolution, Peace Science Society (International), vol. 64(6), pages 1172-1196, July.
    3. Gómez–Déniz, E. & Pérez–Rodríguez, J.V., 2019. "Modelling distribution of aggregate expenditure on tourism," Economic Modelling, Elsevier, vol. 78(C), pages 293-308.
    4. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.
    5. Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2019. "The effects of foreign aid on refugee flows," European Economic Review, Elsevier, vol. 112(C), pages 127-147.
    6. R. R. Croes & Y. J. F. M. Krabbe-Alkemade & M. C. Mikkers, 2018. "Competition and quality indicators in the health care sector: empirical evidence from the Dutch hospital sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(1), pages 5-19, January.
    7. Jakusch, Sven Thorsten, 2017. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Leibniz Institute for Financial Research SAFE, revised 2017.
    8. Sarma, Sisira & Zaric, Gregory S. & Campbell, M. Karen & Gilliland, Jason, 2014. "The effect of physical activity on adult obesity: Evidence from the Canadian NPHS panel," Economics & Human Biology, Elsevier, vol. 14(C), pages 1-21.
    9. Joan Costa-Font & Sergi Jiménez-Martín & Cristina Vilaplana-Prieto, 2016. "Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers," Working Papers 2016-08, FEDEA.
    10. de Souza, Joao Paulo A., 2015. "Evidence of growth complementarity between agriculture and industry in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 1-18.
    11. Iryna Topolyan & Xu Xu, 2019. "Beliefs about the Benefits of Breastfeeding: Formation and Effects on Breastfeeding Intention and Persistence," Journal of Interdisciplinary Economics, , vol. 31(2), pages 143-164, July.
    12. Gilles Duranton & Matthew A. Turner, 2011. "The Fundamental Law of Road Congestion: Evidence from US Cities," American Economic Review, American Economic Association, vol. 101(6), pages 2616-2652, October.
    13. Eichenauer, Vera Z. & Fuchs, Andreas & Brueckner, Lutz, 2018. "The Effects of Trade, Aid, and Investment on China's Image in Developing Countries," Working Papers 0646, University of Heidelberg, Department of Economics.
    14. Mohamed Elheddad & Mohga Bassim & Rizwan Ahmed, 2021. "FDI and economic growth in the GCC: does the oil sector matter?," Economics and Business Letters, Oviedo University Press, vol. 10(3), pages 178-190.
    15. Temple, Jonathan & Van de Sijpe, Nicolas, 2017. "Foreign aid and domestic absorption," Journal of International Economics, Elsevier, vol. 108(C), pages 431-443.
    16. Javier Bueno & Desiderio Romero-Jordán & Pablo del Río, 2020. "Analysing the Drivers of Electricity Demand in Spain after the Economic Crisis," Energies, MDPI, vol. 13(20), pages 1-18, October.
    17. Ronald Bachmann & Daniel Baumgarten & Joel Stiebale, 2014. "Foreign direct investment, heterogeneous workers and employment security: Evidence from Germany," Canadian Journal of Economics, Canadian Economics Association, vol. 47(3), pages 720-757, August.
    18. Eichenauer, Vera Z. & Fuchs, Andreas & Brückner, Lutz, 2021. "The effects of trade, aid, and investment on China's image in Latin America," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 483-498.
    19. Jiao Xu & Chris Forman & Yu Jeffrey Hu, 2019. "Battle of the Internet Channels: How Do Mobile and Fixed-Line Quality Drive Internet Use?," Service Science, INFORMS, vol. 30(1), pages 65-80, March.
    20. Dang, Rey & Houanti, L'Hocine & Sahut, Jean-Michel & Simioni, Michel, 2021. "Do women on corporate boards influence corporate social performance? A control function approach," Finance Research Letters, Elsevier, vol. 39(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:21:y:2015:i:2:p:357-367. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.