Measuring the Effects of Tourists' Relative Willingness to Spend and Third-degree Price Discrimination on Inbound Tourism Expenditure Differentials
Keywords
conditional quantile regression; decomposition analysis; price discrimination; segmentation; tourism expenditure differentials
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 IndexTM 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.
Publication Date
12-2022
Original Citation
Alfarhan, U. F., Nusair, K., Al-Azri, H., Al-Muharrami, S., & Hua, N. (2022). Measuring the effects of tourists’ relative willingness to spend and third-degree price discrimination on inbound tourism expenditure differentials. Tourism Economics, 28(8), 2126–2153. https://doi.org/10.1177/13548166211030016
Document Type
Paper
Language
English
Source Title
Tourism Economics
Volume
28
Issue
8
Copyright Status
Author retained
College
Rosen College of Hospitality Management
Location
Rosen College of Hospitality Management
STARS Citation
Alfarhan, Usamah F.; Nusair, Khaldoon Khal; Al-Azri, Hamed; Al-Muharrami, Saeed; and Hua, Nan, "Measuring the Effects of Tourists' Relative Willingness to Spend and Third-degree Price Discrimination on Inbound Tourism Expenditure Differentials" (2022). Faculty Scholarship and Creative Works. 1153.
https://stars.library.ucf.edu/ucfscholar/1153
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