Understanding tourists’ expenditure patterns: a stochastic frontier approach within the framework of multiple discrete–continuous choices

Andrea Pellegrini (), Igor Sarman () and Rico Maggi ()
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Andrea Pellegrini: Università della Svizzera italiana (USI)
Igor Sarman: Università della Svizzera italiana (USI)
Rico Maggi: Università della Svizzera italiana (USI)

Transportation, 2021, vol. 48, issue 2, No 17, 951 pages

Abstract: Abstract This article analyzes the determinants of tourists’ expenditure behavior through the joint adoption of two microeconometric approaches, namely, the Stochastic Frontier (SF) and the Multiple Discrete Continuous Extreme Value (MDCEV) model. Despite the attention that analysts have dedicated to consumers’ expenditure behavior in recent years, several limitations concerning the role of budget and the phases of money allocation are still affecting the literature on the topic. In this study, the SF is employed to identify the unobserved individual maximum level of spending allotted for a trip. Once estimated, the frontier is included as a travel budget in the utility-maximizing framework of a MDCEV model. The MDCEV approach allows to simultaneously assess two moments characterizing spending decisions. That is, the decision to allocate the budget to several expenditure categories and the decision concerning the amount to allocate to each category. Data adopted for this research is collected by the Swiss Statistical Office (UST) through a representative Household Budget Survey (Haushaltsbudgeterhebung). Data related to Swiss residents’ leisure travel expenditures are investigated; more specifically, the expenditure categories considered in the analysis are Accommodation, Transportation, Shopping and Food & Beverage.

Keywords: Multiple discrete continuous choices; Stochastic frontier regression; Travel budget; Tourist expenditure behavior (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11116-020-10083-2

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