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Modelling Intercontinental Tourism Consumption in S outh A frica: A Systems‐of‐Equations Approach
Author(s) -
Saayman Andrea,
CortésJiménez Isabel
Publication year - 2013
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12018
Subject(s) - tourism , consumption (sociology) , almost ideal demand system , economics , microeconomics , business , advertising , geography , production (economics) , social science , archaeology , sociology
This paper investigates the pattern of inbound tourists' consumption in S outh A frica, examining four main intercontinental markets and five different tourism goods. The empirical investigation develops an almost ideal demand system ( AIDS ) model and it extends recent research by allowing tourists to base their spending decision on the real effective price differences between S outh A frica and their home country. The results show that tourist spending in S outh A frica is a luxury good, and tourists react normally to a change in the relative price of goods. The cross‐price elasticities suggest that the preferences of different markets influence their view of substitutability and complementary effects between various products in S outh A frica.