A frequent mistake in aggregate tourism demand modeling

The use of a composite price index of competing destinations

Bibliographic Data

ID21689412
AuthorsJaume Rosselló (0000-0001-9467-2067, Universitat de les Illes Balears, corresponding author), Andreu Sansó (0000-0002-2845-8932, Universitat de les Illes Balears)
Year2025
Volume31
Issue4
Pages777-788
Publication date2025-06-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueTourism Economics (JOURNAL)
Journal identifiersISSN: 1354-8166 • E-ISSN: 2044-0375
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/13548166241273558
OpenAlexW4401942232
LanguageEN
References cited15

Price is a cornerstone of aggregate tourism modelling, and yet its measurement poses considerable challenges. In this study, we propose a theoretical framework for accurately assessing destination and substitute destination prices, comparing it with empirical methodologies and examining their impact on elasticity estimations. Our findings show that while destination price can be gauged by comparing the consumer price indices of the destination and origin adjusted by the nominal exchange rate, using a weighted measure of substitute prices across various destinations can bias the elasticity estimations of the remaining variables. We advocate separate assessments of the prices of alternative destinations, as opposed to an aggregate one

Composite index · Composite indicator · Destinations · Econometrics · Economics · Financial economics · Geography · Hospitality · Mistake · Tourism · Tourist destinations · Computer Science · Diverse Aspects of Tourism Research · Economic and Environmental Valuation · Economics of Agriculture and Food Markets

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