Beyond Income: US Households' Financial Position Perceptions and Their Willingness to Consume Tourism

Keywords

contraction and expansion cycles; net financial wealth; Tourism demand

Abstract

People’s tourism demand decisions can be affected by perceived shifts in their finances. This study investigates how perceptions of financial positions can affect people’s decisions to consume tourism, using US households as a study case. The literature has given a prominent role to income as a determinant of tourism demand. However, the effect of income on tourism demand may be mitigated by people’s views about their finances. The study contributes to the literature, among others, by considering the possibility of nonlinear effects in the connection between households’ net financial position and their tourism demand. The methodology includes time-series data decomposition, stationarity, cointegration, and an application of the Limited Information Maximum Likelihood regression method. The results show that financial conditions matter for tourism demand and that tourists are heterogenous consumers that do not automatically react to stimuli such as income. The findings may help regional policymakers manage their destinations more effectively.

Publication Date

6-2022

Original Citation

Ridderstaat, J. (2022). Beyond income: US households’ financial position perceptions and their willingness to consume tourism. Current Issues in Tourism, 25(12), 2006–2028. https://doi.org/10.1080/13683500.2021.1935794

Document Type

Paper

Language

English

Source Title

Current Issues in Tourism

Volume

25

Issue

12

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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