Parametric and semi-parametric modelling of vacation expenditures

Abstract

We anaLyse several Zimited dependent variable modets expZaining the budget share that Dutch famitfes spend on vacations. To take account of the substantiaZ number of zero shares in our cross-sectíon data, taro types of models are used. The first ts the single-equation censored regressfon model, of which the Tobit modet is a specfaL case. We estimate and test severaZ parametrfc and semi-parametríc extensíons of the Tobft modeZ. Although the parametric modeZs appear to be misspeciffed, estimated income elasticities o~vacatfon expendítures according to the Tobit model and ita extensfons do not dtfjer substantially. Secondly, me consider taio-equation models, in mhich the decision mhether or not to go on vacation and the decision on the amount to spend are treated separateZy. The~trst decisfon ia modeZled as a bínary chotce equatfon, r~hereas the second is treated as a condittonal reyresston equation. For both equatfons,~e estfmate, test and compare parametric and semi-parametrfc specífícatfons. SfmuZations are used to investigate mhether apparently mísspecified specificatfons índeed Zead to bfased conclusions about íncome eLasticities of vacation expenditures.

US household tourism expenditure and the Great Recession

“…When the model was reestimated, replacing the current income with the total spending that proxies for permanent income, the mean elasticity value of 0.686, was higher than that obtained for current income, although it continued to be below the unit. Thus, in line with the most previous literature (Alegre and Pou, 2004;Alegre et al, 2013;Cai, 1999;Cai et al, 1995;Hagemann, 1981;Melenberg and van Soest, 1996), it can be concluded that the income elasticity of US households' probability of travel is not very sensitive to slight variations in income. Figure 2 shows that the low mean elasticity values are a general feature, with a declining pattern as the households' wealth rises.…”

European outbound tourism in times of economic stagnation

“…Bronner and Hoog () also found that the main summer vacations are no longer a luxury good in times of economic crises. These findings are in contrast to studies conducted in the 1990s stating that tourism is generally a luxury good (Melenberg and van Soest, ).…”

Crisis Resistance of Tourist Demand

“…An explanation for this finding can be found in the fact that currently holidays, in particular the main summer holiday, can be positioned closer to being a necessary good than to being a luxury good during an economic crisis. This finding is contrary to studies in the nineties (Melenberg and van Soest 1996), when tourism was a luxury good for households. A change seems to have occurred as regards the necessity of a holiday.…”