A Microeconometric Study of Travelling Behaviour

The growing availability of leisure in industrialized countries has increased economists’ interest in those industries which meet the needs and demands created by leisure such as entertainment, sports and tourism. In particular travelling has become an economic factor and travelling abroad considerably affects balances of payments, at least for European countries. It is therefore of interest to know why people spend their holidays abroad and what explanatory variables direct the demand for foreign tourism. There has been a number of empirical studies related to this question. However, they all used aggregated data. See, for example, O’Hagan and Harrison (1984) and Smeral (1985). These authors used demand systems (Almost Ideal Demand System and modifications) to model the demand for foreign travel. They also pointed out that most consumers will most likely decide in two or even three steps: At first they decide about travelling at all, then they decide about staying in their country or going abroad, and in a third step they decide about the (foreign) destination. However, no attempt has been made to test this assumption.