Measuring the effects of tourists’ relative willingness to spend and third-degree price discrimination on inbound tourism expenditure differentials

Usamah F Alfarhan, Khaldoon Nusair, Hamed Al-Azri, Saeed Al-Muharrami and Nan Hua

Tourism Economics, 2022, vol. 28, issue 8, 2126-2153

Abstract: Tourism expenditures are determined by a set of antecedents that reflect tourists’ willingness and ability to spend, and de facto incremental monetary outlays at which willingness and ability is transformed into total expenditures. Based on the neoclassical theoretical argument of utility-constrained expenditure minimization, we extend the current literature by applying a sustainability-based segmentation criterion, namely, the Legatum Prosperity Index TM to the decomposition of a total expenditure differential into tourists’ relative willingness to spend and an upper bound of third-degree price discrimination, using mean-level and conditional quantile estimates. Our results indicate that understanding the price–quantity composition of international inbound tourism expenditure differentials assists agents in the tourism industry in their quest for profit maximization.

Keywords: tourism expenditure differentials; decomposition analysis; conditional quantile regression; segmentation; price discrimination (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/13548166211030016 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:28:y:2022:i:8:p:2126-2153

DOI: 10.1177/13548166211030016

Access Statistics for this article

More articles in Tourism Economics
Bibliographic data for series maintained by SAGE Publications ().