Italian Outbound Tourists, Tourists’ Expenditure and Satisfaction

Abstract

The paper aims at investigating the expenditure behavior of Italian tourists travelling abroad for personal purposes. In particular, we focus on the relationship between expenditure and satisfaction of Italian outbound tourists over the period 2007-2017, by using data provided by Bank of Italy. We suggest using the quantile approach in estimating the effect of satisfaction on the different quantiles of tourism expenditure. This feature enriches the understanding of what determines heterogeneity in tourists spending behavior, which is a relevant information for policy makers and destination managers. To control for endogeneity between satisfaction and expenditure, we take advantage from the instrumental quantile estimator (IVQR), which allows us to obtain consistent estimates of model’s parameters. Satisfaction with specific characteristics of the destination is found to be significant in affecting tourists’ expenditure behavior, and this effect differs among quantiles and expenditure categories.