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Ex Post Demand for Australian Tourism Goods and Services

Author

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  • Sarath Divisekera

    (School of Economics and Finance, Victoria University, PO Box 14428 MC, Melbourne 8001, Australia)

Abstract

This study examines the economic parameters underlying the ex post demand for Australian tourism goods and services from ten source markets in Asia, Europe and North America. The results suggest that demand for the five broad commodity aggregates – accommodation, food, transport, shopping and entertainment – representing the key consumption by tourists, is price-inelastic, implying that all goods are necessities from the tourist's point of view. This result is consistent with the empirical reality that, once he or she has arrived in a destination, a tourist is bound to consume the available goods and services. A second important finding is the apparent complementarity of demands. This indicates that tourists tend to purchase a bundle of goods and services, all of which are necessary for the maximization of utility from visitation. The analysis also suggests that the underlying price elasticities exhibited through cross-price elasticity values have important implications for how price sensitivities can be better understood.

Suggested Citation

  • Sarath Divisekera, 2009. "Ex Post Demand for Australian Tourism Goods and Services," Tourism Economics, , vol. 15(1), pages 153-180, March.
    • Handle: RePEc:sae:toueco:v:15:y:2009:i:1:p:153-180
    DOI: 10.5367/000000009787536735
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    References listed on IDEAS

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    1. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, January.
    2. Divisekera, Sarath, 1995. "An Econometric Model of International Visitor Flows to Australia," Australian Economic Papers, Wiley Blackwell, vol. 34(65), pages 291-308, December.
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    Cited by:

    1. Asensi Descals-Tormo & José-Ramón Ruiz-Tamarit, 2024. "Tourist choice, competitive tourism markets and the effect of a tourist tax on producers revenues," Tourism Economics, , vol. 30(2), pages 283-300, March.
    2. Yeh, Chien Chi & Ku, Edward C.S. & Ho, Ching Hua, 2016. "Collaborating pivotal suppliers: Complementarities, flexibility, and standard communication between airline companies and travel agencies," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 92-101.

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