Economic and Social Determinants of International Tourism Spending: A Panel Data Analysis

Peter Romilly, Xiaming Liu, Haiyan Song

Research output: Journal article publicationJournal articleAcademic researchpeer-review


The relationship between international tourism spending and a number of economic and social variables is examined with a panel data set covering 138 countries over the years 1989 to 1995. Panel data are especially useful for the analysis of the influence of social variables such as age structure and urbanization, because these variables change slowly over time but vary considerably between countries. The data set is initially divided into three country groups (low, middle, and high incomes) and the characteristics of the data set are analyzed. The poolability of the data is then tested for, and a heterogeneous intercept model with homogeneous slope coefficients is estimated. Various tests are conducted to determine whether the fixed or random effects models are appropriate. By far the biggest single influence on international tourist spending is income, but the model also identifies the real exchange rate, age structure, and degree of urbanization as significant influences. The elasticity of demand of tourist spending with respect to income for the pooled data set is estimated to be about 0.9. The panel data results are compared with those of other studies.
Original languageEnglish
Pages (from-to)3-16
JournalTourism Analysis
Issue number1
Publication statusPublished - 1998
Externally publishedYes


  • demography
  • international comparisons
  • national accounting
  • socioeconomic status
  • tourism
  • trends


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