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An Analysis of Visitors' Expenditures in a Tourist Destination: OLS, Quantile Regression and Instrumental Variable Estimators

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  • Carlos Santos
  • José Cabral Vieira

Abstract

The impact of tourism on the local economy and employment has been widely reported in the literature through the use of regional or county expenditure multipliers. Indeed, the money that visitors spend in a community is likely to be the benefit that residents probably recognize most readily. Despite this, only a few studies have focused on the determinants of tourist expenditure at the individual or household level. This paper sheds further light on this issue. For this purpose, the authors use information gathered by interviewing visitors about their levels of expenditure. The analysis focuses on total expenditure and expenditures on lodging, restaurants, shopping and car rental, and uses OLS, quantile regression and instrumental variable techniques. The results suggest that the impact of socio-demographic and trip-related characteristics on tourist expenditures goes far beyond the mean effect. Furthermore, correcting for the endogeneity of some explanatory variables might be a worthwhile exercise.

Suggested Citation

  • 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.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:3:p:555-576
    DOI: 10.5367/te.2012.0133
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    References listed on IDEAS

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    Cited by:

    1. Massidda, Carla & Piras, Romano & Seetaram, Neelu, 2020. "A Microeconomics Analysis of the Per Diem Expenditure of British Travellers," Annals of Tourism Research, Elsevier, vol. 82(C).
    2. Martin Falk & Eva Hagsten, 2014. "Output growth and prices of establishments in the Swedish lodging industry," ERSA conference papers ersa14p360, European Regional Science Association.
    3. António Almeida & Brian Garrod, 2017. "Insights from analysing tourist expenditure using quantile regression," Tourism Economics, , vol. 23(5), pages 1138-1145, August.
    4. Luojia Wang & Kerui Du & Bin Fang & Rob Law, 2023. "Escape from air pollution: How does air quality in the place of residence shape tourism consumption?," Tourism Economics, , vol. 29(4), pages 1074-1099, June.
    5. 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.
    6. Choi, Miju & Law, Rob & Heo, Cindy Yoonjoung, 2016. "Shopping destinations and trust – Tourist attitudes: Scale development and validation," Tourism Management, Elsevier, vol. 54(C), pages 490-501.
    7. Christer Thrane, 2016. "The Determinants of Norwegians' Summer Tourism Expenditure: Foreign and Domestic Trips," Tourism Economics, , vol. 22(1), pages 31-46, February.
    8. José Cabral Vieira & Marcos Carolino Antunes, 2017. "Touristic big-game fishing in Saint Michael Island (Azores)," Tourism Economics, , vol. 23(6), pages 1362-1368, September.
    9. José-Manuel Sánchez-Martín & José-Luis Gurría-Gascón & Juan-Ignacio Rengifo-Gallego, 2020. "The Distribution of Rural Accommodation in Extremadura, Spain-between the Randomness and the Suitability Achieved by Means of Regression Models (OLS vs. GWR)," Sustainability, MDPI, vol. 12(11), pages 1-29, June.

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