Simultaneous analysis of whether and how long to go on holidays

Abstract

This article assumes that the decision to go on holiday and the length of stay are nested and non-independent, thus the objective of this study is to propose a two-stage choice process: Going on holiday and length of stay. To do this, we rely on the randomparameter logit model, which accounts for the unobserved heterogeneity of individuals and allows representation of different correlation patterns among nonindependent alternatives. We propose hypotheses on the effect on the above decisions of individual's characteristics relating to the destination, personal restrictions and socio-demographic and psychographic characteristics. The empirical application, which is carried out in Spain on a sample of 3781 individuals, evidences the proposed two-stage choice process, and that these decisions also explained by individual tourist characteristics.