Household income and tourism expenditure: an unconditional quantile regression approach

Although a growing number of studies have investigated the nexus between income and tourism demand, little is known about the heterogeneous income elasticity of tourism expenditure. This study fills this gap by analysing the 2018 China Family Panel Studies household survey data using an unconditional quantile regression model. The findings show that tourism expenditure is income inelastic regardless of the tourism expenditure quantile. Specifically, a 1% increase in per capita household income increases per capita tourism expenditure by 0.514-0.637%. In addition, household income affects tourism expenditure heterogeneously; the effects are larger for households at the higher tourism expenditure quantiles. Furthermore, the income elasticity of tourism expenditure is larger in relatively affluent and advanced regions - it is greater in urban areas relative to rural areas and in the eastern region of China relative to its western region.