A LINEAR EXPENDITURE MODEL FOR TOURISM DEMAND

This study builds a linear expenditure model for demand analysis of domestic US tourism. The model starts with the assumption of consumer utility maximization under budget constraints and uses five commodity groups: transportation, lodging, food service, entertainment/ recreation, and other goods and services. The findings suggest that among the tourism-oriented products, transportation is the most price sensitive product. The widely held perception that tourism products are a luxury may result from the income effect on transportation. The study reveals that the possibility for budget cutting is greatest for transportation and for food service is least. © 1991.