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Price sensitivity to tourism activities: looking for determinant factors

Author

Listed:
  • Lorenzo Masiero

    () (Institute for Economic Research (IRE), Faculty of Economics, University of Lugano, Switzerland)

  • Juan L. Nicolau

    () (Dpt. of Financial Economics, Accounting and Marketing, Faculty of Economics, University of Alicante, Spain)

Abstract

Literature shows evidence that there is a marked heterogeneity in price responses to tourism products, leading to a great variety of tourist sensitivities to price. It means that the role price plays is complex and, particularly challenging is that its effect is not unambiguous, thereby dismissing the idea that demand for tourism products and tourist activities is always that of ordinary goods. The objective of this article is to identify and explain, as a novelty for the tourism industry, price sensitivities to tourism activities -individual by individual-. The operative formalization follows a Mixed Logit Model to estimate the individual sensitivities to price and then, a regression analysis to detect their determinants. The empirical application finds that motivations -influenced by age- and length of stay -with a non-linear effect- are explanatory factors of the tourists' price sensitivity to activities.

Suggested Citation

  • Lorenzo Masiero & Juan L. Nicolau, 2011. "Price sensitivity to tourism activities: looking for determinant factors," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1101, USI Università della Svizzera italiana.
  • Handle: RePEc:lug:wpaper:1101
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    Cited by:

    1. Taiga Saito & Akihiko Takahashi & Noriaki Koide & Yu Ichifuji, 2017. "Optimal overbooking strategy in online hotel booking systems¡ÊRevised as "Application of Online Booking Data to Hotel Revenue Management" in F-448¡Ë," CARF F-Series CARF-F-421, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

    More about this item

    Keywords

    tourism activities; response to prices; market heterogeneity; tourist choice;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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