Face-to-Face or Cyberspace? Choosing the Internet as an Intermediary in the Israeli Travel Market

Aliza Fleischer and Daniel Felsenstein
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Aliza Fleischer: Department of Agricultural Economics and Management, Hebrew University of Jerusalem, PO Box 12, Rehovot 76100, Israel
Daniel Felsenstein: Department of Geography, Hebrew University of Jerusalem, Mount Scopus, Jerusalem 91905, Israel

Tourism Economics, 2004, vol. 10, issue 3, 345-359

Abstract: Existing studies of the trend towards electronic provision of travel services tend to be highly bifurcated. They focus either on the supply-side characteristics of this change (new technologies and mediation platforms) or on the demand-side attributes, such as the socio-economic profile of the Internet user and attitudes towards electronic purchasing in the travel market. The latter approach, however, can lead to sample selectivity bias and misleading parameter estimates. It fails to recognize that actual Internet travel purchases are observable only for individuals who have made the prior decision to use the Internet as a market intermediary. This paper addresses this drawback by modelling the decision to purchase travel products on the Internet in a bivariate probit framework. The choice of travel service intermediary, travel agent (face-to-face) or Internet (cyberspace), is determined by the joint probabilities of general Internet purchasing and specific Internet travel purchasing. Using unique survey evidence of actual Internet transactions, the discrepancies between preferences for Internet travel purchasing and actual travel purchases are highlighted. The results suggest that demand for the latter is more closely related to previous Internet purchasing experience than to the socio-economic attributes of the purchaser.

Keywords: Internet; travel agents; simultaneous bivariate probit (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:10:y:2004:i:3:p:345-359

DOI: 10.5367/0000000041895067

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