Does happiness drive tourism decisions?

• Published in: Economic modelling Vol. 111; p. 105824
• Main Authors: Paniagua, Jordi, Peiró-Palomino, Jesús, Santana-Gallego, María
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.06.2022
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2022.105824

This research examines the role that happiness plays in affecting tourism flows. While most previous studies are country-specific, our analysis is performed with panel data on 142 countries from 2005 to 2019. This allows us to implement a structural gravity model that includes both domestic and international tourism flows, which is a novel approach in this branch of the literature. Our empirical strategy enables us to correctly identify happiness when multilateral resistance terms are included. The results show that happiness at a destination is a significant tourist attractor, although the link follows an inverted U-shaped pattern. This suggests that tourists associate happiness with the quality of life at a destination but after a threshold, it becomes less important. Moreover, when cultural distance is greater, the effect of happiness on tourism arrivals is smaller. Therefore, tourists can better interpret happiness when origin and destination cultures are similar. •We examine the role of happiness in worldwide bilateral tourism movements.•We estimate a structural gravity model with domestic tourism and multilateral resistances.•The happiness level at the destination is a significant tourist attractor.•The role that happiness plays in attracting tourists decreases after a threshold.•Greater cultural distance reduces the positive effect of happiness on tourism.