Tourist arrivals versus tourist expenditures in modelling tourism demand
Abstract
In empirical research, aggregate tourist arrivals and tourist expenditures are often indistinctly used as measures of tourism demand, depending on the aim of the analysis or, simply, on the availability of data. However, when a literature review was conducted, we found differences in the estimated elasticities, accordingly to the measure that was used. This article investigates these two measures, exploring the theoretical link between them in the context of tourism demand modelling at a destination level. Having established the theoretical connection between the two variables with implications on the estimated elasticities, we estimate tourism demand models using international arrivals and tourist expenditures for 191 countries from 1998 to 2016, providing evidence for the theoretical connection. Our results show that when both tourist demand measures are used, the estimated elasticities may differ.