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Microeconomic Determinants of Domestic Tourism Expenditure in India

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  • Azam, Mehtabul

    (Oklahoma State University)

Abstract

Using a nationally representative household survey from India, we examine individuals' domestic tourism participation and trip expenditure decisions together. We control for a large set of explanatory variables broadly classified as economic, socio-demographic and trip related characteristics. We use two-part (hurdle) model to allow explanatory variables to have differential affects on each decision. We find that education is an important determinant for both the decisions. Moreover, trip-related characteristics (party size, stay length, ac- commodation type, travel mode, and destination) are also important determinants of trip expenditure in addition to economic and socio-demographic characteristics. The unconditional quantile regression results show the heterogeneity in the impact of many variables across the trip expenditure distribution. The differences in trip expenditure across age-groups are primarily in the upper half of the trip expenditure distribution. A trip arranged under a tour package leads to an increase in trip expenditure at the higher quantiles of trip expenditure distribution.

Suggested Citation

  • Azam, Mehtabul, 2022. "Microeconomic Determinants of Domestic Tourism Expenditure in India," IZA Discussion Papers 15245, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15245
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    References listed on IDEAS

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    1. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    2. Bernini, Cristina & Cracolici, Maria Francesca, 2015. "Demographic change, tourism expenditure and life cycle behaviour," Tourism Management, Elsevier, vol. 47(C), pages 191-205.
    3. Marrocu, Emanuela & Paci, Raffaele & Zara, Andrea, 2015. "Micro-economic determinants of tourist expenditure: A quantile regression approach," Tourism Management, Elsevier, vol. 50(C), pages 13-30.
    4. Sharma, Abhijit & Woodward, Richard & Grillini, Stefano, 2020. "Unconditional quantile regression analysis of UK inbound tourist expenditures," Economics Letters, Elsevier, vol. 186(C).
    5. Joaquín Alegre & Llorenç Pou, 2004. "Micro-Economic Determinants of the Probability of Tourism Consumption," Tourism Economics, , vol. 10(2), pages 125-144, June.
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    More about this item

    Keywords

    unconditional quantile regression; two-part model; expenditure; tourism participation;
    All these keywords.

    JEL classification:

    • Z3 - Other Special Topics - - Tourism Economics
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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