Analyzing Tourist Consumption: A Dynamic System-of-Equations Approach

• Published in: Journal of travel research Vol. 50; no. 1; pp. 46 - 56
• Main Authors: Chenguang Wu, Doris, Gang Li, Haiyan Song
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01.01.2011; SAGE PUBLICATIONS, INC
• Subjects: Consumer spending; Demand; Dynamic tests; Dynamical systems; Dynamics; Expenditures; Gain; Marketing; Mathematical models; Prices; Studies; Tourism; Hong Kong China; China; dynamics; almost ideal demand system; elasticity analysis; tourism demand
• ISSN: 0047-2875; 1552-6763
• DOI: 10.1177/0047287509355326

The dynamic system-of-equations approach has been used to analyze the demand for outbound tourism among a number of destinations. However, this approach has not been applied to the context of the tourist consumption of different products in a given destination. Given the importance of understanding tourists’ consumption behavior to destination management, this study seeks to gain new insights into Hong Kong inbound tourist expenditure patterns using a dynamic system-of-equations approach: the almost ideal demand system model. Based on the estimation of a complete demand system, this study investigates the interactions among the demand for different tourism products (i.e., shopping, hotel accommodation, meals outside hotels, and other) and the impacts of price changes on demand. Tourists from different source markets are examined separately, and the results show that their consumption behavior differs significantly.