Sub-dimensions of consumer confidence and outgoing tourist expenditures

ABSTRACT

This paper explores the relationship between the sub-dimensions of consumer confidence (financial situation, general economic situation, unemployment expectations and savings) and the various categories of outgoing tourist expenditures (accommodation, entertainment, excursion, food, shopping and travel within the country) across 22 European countries. Due to the low frequency of national time series data, the panel data regressions are used to estimate the relationships between the variables. The findings show a positive association between consumer confidence and outgoing tourist expenditures. More specifically, we find that tourists with low levels of confidence in their employment are likely to spend less on excursion and shopping activities, while tourists with higher levels of confidence in their future savings spend more on entertainment, excursions and shopping.

KEYWORDS:

• Consumer confidence
• tourist expenditures
• panel data

Acknowledgments

We thank seminar participants at the 27th Council for Australasian Tourism and Hospitality Education (CAUTHE) Annual Conference 2017, Dunedin, New Zealand; the editor and anonymous referees.

Notes

1. George Katona documented the development of his theories in a series of books: Psychological Analysis of Economic Behavior (1951), The Powerful Consumers (1960), The Mass Consumption Society (1964), and Psychological Economics (1975).

2. See http://data.worldbank.org/indicator/ST.INT.XPND.CD

3. More details on the consumer confidence indicator can be found via the following link: http://ec.europa.eu/economy_finance/db_indicators/surveys/documents/bcs_user_guide_en.pdf

4. It should be noted that in order to avoid multicollinearity (due to high correlation between the CC dimensions), the CC dimensions were added to the regression analyses one by one.

5. FYR Macedonia and FYRM are the abbreviations for the Former Yugoslav Republic of Macedonia.